Buy Aptus Value Housing Finance; target of Rs 400: ICICI Securities

ICICI Securities is bullish on Aptus Value Housing Finance has recommended buy rating on the stock with a target price of Rs 400 in its research report dated August 04, 2024.

Broker Research

August 06, 2024 / 14:55 IST

BUY

26 Aug, 2025 12:21

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ICICI Securities's research report on Aptus Value Housing Finance

Improving trajectory in Aptus Value Housing Finance’s (Aptus) financial performance sustained in Q1FY25, evident in RoE expanding to 18.1%, from 16.9% in Q1FY24, mainly driven by lower credit cost. While tech upgradation derailed growth momentum with Apr’24 disbursements falling by 77% YoY, it still delivered 4% YoY disbursement growth in Q1FY25. Adjusted for Apr’24, disbursement grew by a healthy 35% YoY during Q1FY25, reflecting resumed normalcy during May’24 and Jun’24. Overall, AUM grew by 27% YoY/4% QoQ. The company reported a PAT of INR 1.7bn, up 5% QoQ, supported by a >50% QoQ fall in provisions. Portfolio quality deteriorated marginally with collection efficiency falling to 99.18% vs. 100.15% QoQ, resulting in higher 30+ DPD to 6.3% vs 5.4% QoQ.NII grew by 4% QoQ despite muted business during Apr’24.

Outlook

While spreads sustained at 8.7% in Q1FY25, increasing leverage led to NIM contracting to 12.80% vs. 13.45% during FY24. Aptus remains as one of the most costefficient- AHFC lender with steady cost-income ratio of 21% vs. peers' ~30%. Lower other income, at INR 97mn, vs. INR 166mn QoQ led to flat QoQ PPoP at INR 2.2bn. However, RoA was healthy at 7.7% during Q1FY25. We retain BUY and our TP of INR 400, valuing Aptus at 4.3x on Sep’25E BVPS.

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