Prabhudas Lilladher's research report on AAVAS Financiers
Aavas at its analyst meet showcased its ‘Vision 3.0’ which would mainly focus on scalability & standardization while governance, asset quality, profitability and growth, in that order, would remain priorities. Key takeaway was that company wants grow consistently with a runway of 10-15 years given large potential in affordable housing coupled with its capabilities in underwriting and technology/analytics. While management did allay stakeholder concerns of senior management stability, it is imperative that all CXOs be with the company for long term. Promoters clarified again that they do not intend to sell any stake in the near term. However, being private equity players we believe they would exit at some point which would be an overhang.
Outlook
We remain watchful as execution and mid-level retention are a key. We maintain our multiple at 3.0x FY25E ABV and TP at Rs1,560. Retain HOLD.
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