Aptus Value Hou.

Aptus reported a 27% YoY increase in AUM to ₹9,679 crores, maintaining its focus on the underserved self-employed segment in Tier 2, 3, and 4 cities. Disbursements saw a significant sequential jump of 39% to ₹935 crores in Q2 FY25. Management is confident in reaching a ₹4,000 crore disbursement target for the full year, implying a required run rate of approximately ₹2,400 crores in H2 FY25.

Asset quality remains a core strength with GNPA at 1.25% and Net NPA at 0.94%. The company maintains a conservative provisioning stance with a total provision of ₹100 crores, including a ₹45 crore management overlay, resulting in an effective NPA coverage of 82%. Collection efficiency remains high at 99.28%, and management expects the 30+ DPD (currently 6.24%) to trend downwards in the coming quarters.

The company addressed a slowdown in its primary market, Tamil Nadu, where disbursement growth lagged at 8-9% due to internal team restructuring and attrition. Management has corrected these internal issues and expects Tamil Nadu's disbursement growth to accelerate to 20% in Q3 and 25% in Q4 FY25. This recovery is critical for achieving the overall 30% AUM growth guidance.

Digital adoption is becoming a significant lead generator, with 20% of Q2 business sourced through the customer referral app, construction ecosystem app, and social media. The construction ecosystem channel, involving paint and cement shop owners, is particularly productive with higher conversion ratios and average ticket sizes of ₹9-9.5 lakhs. This multi-channel approach complements the physical network of 291 branches.

Aptus maintains a diversified borrowing profile with 59% from banks and 19% from NHB. To manage interest rate cycles, the company has shifted 20% of its total borrowings to REPO-linked external benchmarks. Despite a 2.5% increase in the Repo rate over the cycle, Aptus only increased customer rates by 0.5-0.75%, absorbing the rest while maintaining a healthy NIM of 13.02% and spreads of 8.7%.