Aptus Value Housing Finance Q4 Results Review - Strong Quarter; Improving Asset Quality Metrics: Dolat Capital
Spreads impact limited so far; to be more pronounced in FY24E.
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Dolat Capital Report
Aptus Value Housing Finance Ltd. reported a good quarter with net interest income growth of 27% YoY, profit after tax growth of 23% YoY, calculated return on asset at 7.7%, and continued improvement in asset quality metrics.
Advances grew at 7% QoQ (30% YoY). Even with low leverage of 2.2 times, return on equity stood at 16.5% for the quarter.
Reported spreads moderated by 25 basis points YoY, even as calculated spreads were higher. Cost/assets were contained at 2.6% for the quarter and 2.5% for FY23.
Aptus Value's asset quality improved with gross stage-III ratio and 30 plus days past due at 1.15% (1.45% in Q3) and 5.9% (6.3% in Q3) respectively. Credit costs stood at 50 bps in Q4 as the housing finance company continued to provide more against stage-I and II assets.
The HFC also witnessed senior level changes (appointment of M. Anandan (Managing Director and Chief Executive Officer as the Executive Chairman of the company, elevation of P.Balaji (CFO and ED) to MD role, and John Vijayan Ravappa as CFO of the company), partly clearing air around succession planning at the HFC.
We continue to build in superior RoA/RoE at ~7%/19% by FY25E driven by its industry best margins, contained opex and limited credit costs.
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