Aptus Value Housing Finance India Limited — Q3 FY25 earnings call

Call held 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

  • 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

Key financials

  1. AUM ₹10,226 Cr +27%YoY
  2. PAT (9 Months) ₹544 Cr +22%YoY
  3. NIM 12.9%
  4. NPA 1.3%
  5. ROA 7.7%
  6. ROE 18.5%

What they filed

Q1 FY27: revenue up 15.4%, net profit up 19.2% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue421 450 484 520 544 +29%554 +23%574 +19%600 +15%
EBITDA353 383 409 439 453 +28%455 +19%— —
Net profit182 190 207 219 227 +25%236 +24%261 +26%261 +19%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

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

Guidance & targets

Other

  • AUM Other · by FY 2028 · High confidence ₹25,000 crores
    Further, to support the vision of reaching loan book of Rs.25000 crore AUM by FY 2028, we have been continuously strengthening the organization...

    — M. Anandan, Executive Chairman

  • Loan Book Growth Other · next 2-3 years · High confidence 25% to 30%
    See, one thing is we are guiding the market with 25% to 30% loan book growth in the next 2, 3 years.

    — P. Balaji, Managing Director

  • Credit Cost Other · FY25 · High confidence 0.35% to 0.4%
    From the guidance perspective, we have been guiding 0.35% to 0.4% as credit cost, that will continue.

    — P. Balaji, Managing Director

  • Opex to Assets Other · FY25 · Medium confidence 2.7%
    And I think we have been guiding around 2.7%, and that will be the ratio that will be maintained.

    — P. Balaji, Managing Director

  • Branch Expansion Other · every year · High confidence 35 to 40 branches
    And if you look at our strategy of growth, we will be opening around 35 to 40 branches every year.

    — P. Balaji, Managing Director

Risks & concerns

  • Interest Rate Repricing

    medium

    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

  • Geographical Concentration and Seasonality

    low

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

    Management acknowledged

  • Regulatory/Administrative Delays (e-Khata)

    low

    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

Areas of evasion (1)

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

Q&A highlights

3 direct
Employee Cost Stability Direct
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

Write-off Policy and Credit Cost Direct
That is basically because of technical write-off, which means we have this accounting policy of more than 24-month NPA, where we technically write it off in the book of accounts... net credit cost as compared to the previous quarter, it was 0.38%, and now it has reduced to 0.32%.

Clarifies that the elevated P&L debit for write-offs is technical and offset by bad debt recoveries, resulting in a lower net credit cost.

Asked by Yash, Citigroup

ROA and ROE Trajectory with Leverage Direct
The 7.7% ROE [sic - likely meant ROA] may fall down to 6% or 6.5% at that point in time. But the 18.54% ROE is likely to go beyond 22% at that point in time.

Management explicitly outlines the long-term financial profile: sacrificing some ROA for higher leverage to drive ROE above 22% as the book scales to ₹25,000 crores.

Asked by Rajnikant Shah, Individual Investor

2 min read 5 chapters

Detailed narrative

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.

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.

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.

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.

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.
View original transcript

More Financial Services earnings calls