Aptus Value Housing Finance India Limited

Aptus Value Housing Finance reported a strong Q3 FY26, with Assets Under Management (AUM) growing 21% year-on-year to INR12,330 crores from INR10,226 crores. Disbursements for the quarter increased by 11% YoY to INR1,030 crores, contributing to a 9% YoY growth in 9M FY26 disbursements to INR2,768 crores. The company maintained healthy profitability, with Net Income Margin growing 26% YoY to INR406 crores, and ROE sustained above 20.2%, positioning it among the highest in the industry.

The company consciously pulled back from loans below INR7 lakhs, a segment that contributed INR148 crores in Q1 FY26 and INR432 crores in 9M FY25. This strategic decision, not driven by asset quality concerns but by proactive risk management in MFI and small LAP segments, is expected to result in a 10-11% reduction in current AUM over time^⏳. Concurrently, Aptus is increasing its average ticket size (ATS) from INR8-9 lakhs to INR10-10.5 lakhs to attract better quality customers and align with rising construction costs, with minimal impact on overall yields (less than 10 basis points).

Aptus is aggressively expanding its physical footprint, planning 40 new branch openings in FY26 (most already operational) and accelerating to 60-70 branches in the next financial year. This expansion is focused on new states like Maharashtra and Odisha, where the company has opened 8 and 9 branches respectively in Q3 FY26, and aims for 10 branches in each by year-end. While these new states currently contribute a small portion (INR109 crores in 9M) to the total AUM, they are expected to drive future growth. In core states like Tamil Nadu, growth is targeted to increase from 15% to 18%.

Asset quality remained largely stable with Gross NPA at 1.56% and Net NPA at 1.18%. However, a slight uptick in 30-plus DPD to 6.48% was observed due to seasonal volatility, and a minor increase in SME loan NPAs was noted. Management is confident in controlling these issues by Q4 FY26, leveraging strong MIS and existing cushions like 35-40% LTV and 50% installment-to-income ratio. The credit cost for 9M FY26 remained within the guided range at 50 basis points, with a reiteration of 0.5% guidance for FY27.

The company raised approximately INR902 crores in Q3 FY26 through NCDs, term loans, and securitization, maintaining a diversified liability profile (59% banks, 11% NHB, 17% NCDs). The cost of funds declined to 8.3% over the last four quarters from 8.7%. Ongoing treasury efforts include negotiating with banks to reduce interest rates, successfully bringing down rates on some loans from 9.25% to 8.4% and securing new facilities at 7.95%. This optimization contributes to improved spreads and supports calibrated lending rates.

While the market opportunity is vast, competition is heightened in Tamil Nadu from existing NBFCs/HFCs, small finance banks, and PSU banks. However, competition is less acute in newer states like Odisha and Maharashtra. Management highlighted that the primary competition is in human resources, specifically attrition at the branch level, rather than business or market share. Aptus is piloting a 'connector channel' in Tamil Nadu and Andhra Pradesh as an additional lead generation mechanism to enhance business growth.