Aptus Value Housing falls on weak operating performance in Q1FY24

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Aptus Value Housing Finance share price erased early gains and slumped over a percent on August 2, a day after the company reported sequential compression in net interest margins for the quarter-ended June.

Net Interest Margin (NIM) for the firm stood at 8.85 percent for the June quarter compared to 8.9 percent in March quarter and 9.17 percent in the year-ago period. This came on the back of the higher cost of funds.

At 12:45 pm, the stock was quoting at Rs 265.20 on the NSE, lower by 1.1 percent from previous close.

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While margins were lower, Chennai-headquartered Aptus Value Housing Finance posted 20 percent YoY growth in profit after tax at Rs 142 crore in Q1 FY24.

While disbursements rose by 23 percent to Rs 646 crore, its assets under management (AUM) stood at Rs 7,123 crore as on June 30, 2023. The gross NPA (non-performing assets) decreased by 46 basis points at 1.29 percent from 1.75 percent in Q1 FY23.

M Anandan, executive chairman, Aptus Value Housing Finance India, said, “Digital adoption continues to be strong and about 14% of our business in Q1 FY 24 has come from construction eco system app, customer referral app and social media leads. Going forward our focus shall be on increasing the leads through these channels.”

Morgan Stanley has an Overweight rating on the stock with a target price of Rs 325, largely on the back of strong performance in AUM growth and a decline in Stage 3 assets.

Stage 3 assets in non-banking finance companies (NBFC) are loans which have been overdue for more than 90 days.

Jefferies also has a Buy rating for Aptus Value, with a target price of Rs 330. The 23 percent year-on-year surge in disbursements, along with 29 percent growth in home loans has impressed Jefferies' analysts.

The housing financier has scheduled its earnings concall later in the day, following which other brokerage houses might revisit ratings.