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    Aptus Value Hou.

    APTUSGood
    Financial Services·3 Feb 2025
    Management Summary

    Aptus Value Housing Finance delivered a strong Q3 FY25, hitting the significant milestone of ₹10,000 crore in AUM while maintaining industry-leading profitability metrics (ROA of 7.7%). The company is successfully diversifying its borrowing profile and expanding geographically into Maharashtra and Odisha. Management expressed high confidence in reaching a ₹25,000 crore AUM target by FY2028 through consistent branch expansion and productivity improvements.

    Highlights

    8

    • AUM crossed the ₹10,000 crore milestone, reaching ₹10,226 crores, up 27% YoY

    • 9M FY25 PAT stood at ₹544 crores, representing a 22% YoY growth

    • Disbursements for the quarter grew 21% YoY to ₹930 crores

    • Asset quality remained stable with NPA at 1.28% and NNPA at 0.96%

    • Net Interest Margin (NIM) remained robust at 12.94%

    • Return on Assets (ROA) at 7.70% and Return on Equity (ROE) at 18.54%

    • Branch network expanded to 298 branches, with 36 added in the first 9 months of FY25

    • Collection efficiency reported at 99.32% for the quarter

    What Changed1

    vs Q4 FY25

    Guidance items6 → 5 (-1)

    Key financials

    Single quarter

    06 metrics
    1. 01AUM₹10,226 Cr+27%YoY
    2. 02PAT (9 Months)₹544 Cr+22%YoY
    3. 03NIM12.9%
    4. 04NPA1.3%
    5. 05ROA7.7%

    Segment breakdown

    Product Mix (AUM)
    61% Housing Loan14% Quasi Home Loan21% Small Business Loan
    List

    Guidance & targets

    5
    CategoryTargetPriority
    Other
    AUM
    ₹25,000 crores
    		High
    Other
    Loan Book Growth
    25% to 30%
    		High
    Other
    Credit Cost
    0.35% to 0.4%
    		High
    Other
    Opex to Assets
    2.7%
    		Medium
    Other
    Branch Expansion
    35 to 40 branches
    		High

    Risks & concerns

    4
    RiskSeverity

    Interest Rate Repricing

    23% of borrowings are linked to market rates/external benchmarks and will reprice immediately if rates change; a 0.1% NIM decrease is possible if rate cuts don't occur. — Management acknowledged

    medium

    Geographical Concentration and Seasonality

    Tamil Nadu was affected by floods in November and a high number of holidays in October, which slightly impacted collection efficiency. — Management acknowledged

    low

    Regulatory/Administrative Delays (e-Khata)

    The e-Khata issue in Karnataka can delay disbursements from 7 days to 15 days, though management is mitigating this by advising customers to plan ahead. — Analyst acknowledged

    low

    Areas of Evasion(1)

    • Specific commission rates on insurance products (deferred for later discussion).

    Q&A highlights

    3

    “So, because of that, the volume-related incentives did not increase. So that is one reason... all these additions have happened during the tag end of the quarter and maybe to that extend the cost catching up will come in the fourth quarter.”

    Explains why opex remained flat despite branch and headcount additions, suggesting a potential step-up in costs in Q4.

    asked by Rajiv Mehta, YES Securities

    2 min read5 chapters

    Detailed Narrative

    01

    Milestone Achievement and Growth Trajectory

    Aptus crossed the ₹10,000 crore AUM milestone in Q3 FY25, supported by 27% YoY growth. Management has set an ambitious target to reach ₹25,000 crore AUM by FY2028. This growth is expected to be driven by a 25-30% annual increase in the loan book and the addition of 35-40 branches per year, focusing on tier 3 and 4 cities.

    02

    Asset Quality and Credit Cost Management

    Asset quality remains a core strength with NPA at 1.28% and NNPA at 0.96%. While gross write-offs appeared elevated at ₹12.5 crores for the quarter, management clarified these are technical write-offs for 24-month DPD accounts. Net credit cost actually improved to 0.32% when accounting for ₹5 crores in bad debt recoveries. The company maintains a total provision of ₹105 crores, providing 80% coverage on NPAs.

    03

    Operating Leverage and Efficiency

    Opex to assets stood at 2.61%, which management claims is the lowest in the industry. Employee costs remained stable quarter-on-quarter despite adding 36 branches in 9 months, primarily because flat QoQ disbursements led to lower volume-related incentives. Management expects to maintain opex around the 2.7% level even as they invest in middle management and new geographies.

    04

    Geographic Expansion Strategy

    The company is expanding contiguously into Maharashtra and Odisha, where they have already opened 10 branches and clocked a ₹27 crore loan book. While Tamil Nadu and Andhra Pradesh remain the primary markets with deep penetration (branches every 50-60km), the new states are expected to provide the next leg of growth. Management noted that competition in these new markets is manageable at their current peripheral locations.

    05

    Liability Management and NIM Sustainability

    Aptus maintains a diversified borrowing profile with 54% from banks and 18% from NHB. NIM remains high at 12.94%. Management indicated that while a lack of rate cuts might lead to a minor 10bps compression in NIM due to variable-rate borrowings (53% of total), the overall spread remains protected by high-yield product segments like Small Business Loans (20-21% yield) and Quasi Home Loans (17-18% yield).

    This is an AI-generated summary of a publicly available earnings call transcript. It is for informational purposes only and does not constitute investment advice, a recommendation, or an endorsement. inve.money is not a SEBI-registered investment advisor. Please consult a qualified financial advisor before making any investment decisions.