Aptus Value Housing Finance India Ltd. Share Price

Aptus Value corrects 28% despite maintaining an 8% RoA

has corrected 28% over the past year despite maintaining a return on assets of 7.8% to 8.0%. The company is targeting an AUM growth of 22% to 24% for FY27 while maintaining credit costs at 50 to 60 basis points. The market has heavily penalized the stock over seasonal delinquency concerns, but the fundamental earning power of the company remains untouched. While early-stage delinquencies rose temporarily within its NBFC subsidiary, asset quality has already begun stabilizing with July collections driving a 20 basis point drop in 30+ DPD metrics. With a blended yield near 17% and net interest margins projected at 12.5% to 13.0%, the core spread capability of 9% remains fully intact. The headline stock drop obscures the fact that operating leverage and a steady opex-to-AUM ratio of 2.7% position the company for significant margin durability. Trading at 1.5 times estimated FY28 book value, the current price offers an attractive entry point, though high exposure to vulnerable asset classes requires a higher risk tolerance. Investors should closely track collection efficiency trends, asset quality in the non-housing NBFC portfolio, and execution in non-southern branch expansions. Aptus Value Housing Finance APTUS presents a favorable risk-reward profile at current valuations, with an Overweight rating. Disclosure: This post is for educational and informational purposes only and does not constitute investment advice or a recommendation to buy or sell any security.

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: Affordable Housing Play at Deep Discount

, focused on the affordable housing segment (average ticket size ~₹15 lakh), has long trailed industry loan growth due to high run-downs in its legacy portfolio. Despite subdued growth, the stock has delivered strong returns over the past year, supported by attractive valuations and improving asset quality. With disbursements picking up and stress easing in key geographies, Repco is positioned for a gradual turnaround. Financial & Operational Performance - Q3FY26: Loan book growth ~9% YoY; disbursements up 40% YoY, sanctions up 35% YoY. - ROA dipped below 3% in 9MFY26 (vs. 3.1% in 9MFY25) due to higher operating expenses. - Asset mix: 71% housing mortgages, keeping asset quality relatively stable. - Provision coverage ratio (PCR): ~53%, providing cushion against stress in self-employed customer base (~53% of mix). Asset Quality Trends - Gross Stage 3 (NPA): 2.9%, improved by 100 bps YoY. - Gross Stage 2: 8%, down 260 bps YoY. - Early delinquencies improving; GS2 ratios expected to decline 200–250 bps annually in medium term. - Sustained improvement in collections and provision write-backs to support profitability. Growth Drivers - Management guidance: Disbursements to reach ₹4,000 crore in FY26, ₹5,000 crore in FY27. - Geographic expansion into non-core high-growth states (Maharashtra, Telangana). - Upgradation of sales verticals and sourcing channels to boost growth. - Strong pricing power in Tamil Nadu (57% of AUM), aided by high-yield home equity mix and lower funding costs. Valuation & Outlook - Current valuation: 0.5x FY28E P/B, at a deep discount to peers. - Aptus Value trades at 1.5x, Home First at 1.8x, Aadhar Housing at 2x FY28E P/B. - Re-rating hinges on steady loan growth and sustained asset quality improvement. - Risks: Geographic concentration and exposure to vulnerable customer segments. - Suitable for investors with higher risk appetite, given potential upside from sectoral tailwinds and improving fundamentals.

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Credit Costs Weigh, But

Retains Industry-Leading Returns

has faced growth moderation and asset quality stress due to its high exposure to self-employed borrowers (~78% of AUM). Despite these challenges, Aptus continues to deliver industry-leading return ratios with ROA at 7.9% and ROE at 20% in 9MFY26, supported by strong margins and cost discipline. Following a sharp stock correction of over 30% after promoter WestBridge Capital’s exit, valuations appear attractive, with potential for re-rating once growth accelerates and credit costs stabilise. Business Performance & Strategy - AUM: ₹12,330 crore, concentrated in semi-urban and rural markets. - Growth moderation: Guidance revised to 22–24% CAGR (from 25%) due to recalibration in LAP segment. - Geographic mix: Tamil Nadu (~31% of AUM) remains core; expansion underway in Odisha and Maharashtra. - Loan mix: Higher share of non-housing/LAP loans; focus shifting to higher-ticket, better-quality customers. Profitability & Margins - NIM: 13.4% in 9MFY26, supported by lower borrowing costs and fixed-rate asset mix. - ROA: 7.9%, ROE: 20%, among the highest in the sector. - Hybrid model yields superior spreads compared to peers (Home First, Aadhar Housing, Aavas). Asset Quality & Risk Management - Stress evident in self-employed borrower segment. - Early delinquency uptick led to higher credit costs. - Focus on stronger collections and prudent underwriting to stabilise asset quality. - Credit cost expected to remain steady with resilient collections. Valuation & Outlook - Current valuation: 1.6x FY28E book value, attractive relative to growth potential. - Stock correction reflects sector-wide concerns on credit costs and growth slowdown. - Re-rating hinges on: - Loan growth revival via branch expansion and higher-ticket loans. - Stabilising asset quality. - Sustained industry-leading return ratios. - Suitable for investors with higher risk appetite, given geographic concentration and exposure to vulnerable borrower segments.

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