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Aptus Value Housing Finance India Ltd (Aptus) is primarily a retail focused housing finance company serving low and middle income self-employed rural and semi-urban customers. As per CRISIL, Aptus is one of the largest housing finance companies in south India in terms of AUM, as of FY21. The company’s AUM has increased at a CAGR of 34.5% from ₹2,247.2 cr in FY19 to ₹4,067.8 cr in FY21.

Aptus offers customers home loans for the purchase and self-construction of residential property, home improvement and extension loans. The company does not provide any loans to builders or for commercial real estate. It normally targets first time home buyers where the collateral is a self-occupied residential property. The company does not provide any loans with a ticket size above ₹25 lakhs and the average ticket size of home loans, loans against property and business loans on the basis of disbursement amounts was ₹7.2 lakhs, ₹7.1 lakhs and ₹6.2 lakhs as of FY21, respectively.

Over FY19-21, Aptus’s NII/operating profit/PAT grew at a CAGR of 43.9%/ 51.0% / 54.7% to Rs.430.1 cr / Rs.350.9 cr / Rs.266.9 cr, respectively. Its FY21 calculated NIM stood at 10.5% with average yield at 15.5%. The FY21 GNPA stood at 0.69% (+29bps over FY19) while NNPA stood at 0.49% (+19 bps over FY19). Going forward, we expect Aptus’ AUM to grow at a 29.7% CAGR over FY21-24E while NII/operating profit/PAT is expected to grow at a CAGR of 22.5%/ 24.1% / 23.5% to Rs. 790.9 cr / Rs.671.5 cr / Rs.502.3 cr, respectively. We expect asset quality to be more or less stable with FY24 GNPA and NNPA at 0.9% & 0.7% of loan book respectively.

Valuation

At the upper band of Rs 353, the company is valued at 8.6x FY21 P/BV.

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