Aptus Value Housing Finance India Limited — Q4 FY25 earnings call

Call held 7 May 2025

Management summary

Aptus delivered a strong performance in FY25, characterized by 25% AUM growth and best-in-class return ratios (RoA > 7%). The company is successfully diversifying its geographic footprint into Odisha and Maharashtra while maintaining a conservative 80% fixed-rate loan book. Management has signaled a strategic shift by exploring Direct Assignments (DA) to improve peer-to-peer financial comparisons and optimize ALM.

Highlights

  • AUM grew by 25% YoY to reach ₹10,865 crores

  • Full-year PAT stood at ₹751 crores, representing a 23% YoY growth

  • Industry-leading profitability with RoA at 7.73% and RoE at 18.76% (Q4 RoE crossed 19.66%)

  • Net Interest Margin (NIM) remained robust at 12.96% for the quarter

  • Asset quality remains stable with GNPA at 1.19% and Net NPA at 0.89%

  • Disbursements for the quarter increased 10% YoY to ₹1,064 crores; full-year growth at 15%

  • Capital adequacy remains exceptionally high at 70% with a net worth over ₹4,300 crores

Key financials

  1. AUM ₹10,865 Cr +25%YoY
  2. PAT ₹751 Cr +23%YoY
  3. NIM 13%
  4. RoA 7.7%
  5. GNPA 1.2%
  6. ROE 18.8%

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.

Guidance & targets

Volume

  • AUM Volume · by FY 2028 · High confidence ₹25,000 crores
    Further, to support our vision of reaching loan book of INR25,000 crores AUM by FY 2028, we've been continuously strengthening the organization.

    — M. Anandan, Executive Chairman

  • Disbursement Growth Volume · FY26 · Medium confidence 24-25%
    Disbursement growth will be the resultant we are around 23%, 24% or maybe 25%.

    — P. Balaji, Managing Director

Revenue

  • AUM Growth Revenue · FY26 · High confidence 28-30%
    The AUM growth, we are guiding around 28% to 30%.

    — P. Balaji, Managing Director

Capacity

  • Branch Expansion Capacity · FY26 · High confidence 50
    Basically, in Odisha, Maharashtra... We'll be opening 10 more branches in this year... in the existing states... we are planning to open a total of around 40 branches.

    — P. Balaji, Managing Director

Profitability

  • Credit Cost Profitability · FY26 · Medium confidence 40-45 bps
    See, what our guidance on the credit cost is around 40 to 45 basis points.

    — P. Balaji, Managing Director

Margin

  • Opex to Assets Margin · FY26 · Medium confidence 2.63-2.7%
    So this 2.63% to 2.7% cost to assets will continue, that will be the guidance from us.

    — P. Balaji, Managing Director

Risks & concerns

  • Tamil Nadu Ordinance on Usurious Interest

    medium

    Management is monitoring the new ordinance but believes their regulated status and ₹8-9 lakh ticket size will insulate them from impacts felt by MFIs.

    Both acknowledged

  • Geographic Concentration in Andhra Pradesh

    medium

    AP share is over 40% of AUM; management is actively diversifying into Odisha and Maharashtra to derisk.

    Analyst acknowledged

  • High Field-Level Attrition

    medium

    Field-level attrition is high at 40-45%, though middle and top management attrition is very low (0-5%).

    Analyst acknowledged

Areas of evasion (1)

  • Specific breakdown of fixed vs floating rate on bank borrowings was not immediately available.

Q&A highlights

3 direct
Disbursement Growth Base Effect Direct
If you factor in that 1-month disbursement, the disbursement growth would have been around 18% to 19%... it is actually because of the base effect, the growth is at 10%.

Explains why Q4 disbursement growth appeared lower (10%) compared to the full year (15%) due to a high base in the previous year and a shift in reporting timelines.

Asked by Rajiv Mehta

Strategic Shift to Direct Assignment (DA) Direct
Somehow for this interfirm comparison now we sort of ignore the direct assignment income done by Peers... we are really at a disadvantage and that's also the path, which we have been taken into consideration.

Management admits they are starting DA transactions primarily to improve financial metrics (NIM/ROE) for better comparison against peers who upfront income from assignments.

Asked by Nidhesh

Stage 2 Provisioning and PCR Direct
We wanted to maintain the provision coverage ratio at around 1.03%... in the NBFC, the loan book from INR1,900 crores has gone to INR3,000 crores. So we wanted to strengthen the provision coverage there.

Clarifies that higher provisioning in Stage 2 was a conservative move to maintain a steady PCR of 1.03% across a rapidly growing NBFC book, rather than a sign of underlying stress.

Asked by Renish

2 min read 5 chapters

Detailed narrative

Strategic Pivot to Direct Assignments

Aptus has historically avoided Direct Assignments (DA), but executed its first transaction of ₹75 crores this quarter. Management explained this shift is driven by the need for better 'interfirm comparison,' as peers who use DA report higher upfronted NIMs and ROEs. They plan to continue DA selectively, targeting ₹100-150 crores per quarter, which will also serve as an ALM management tool and help diversify funding sources.

Geographic Diversification Strategy

To reduce dependency on Tamil Nadu (now ~30% of AUM) and Andhra Pradesh (>40%), Aptus is expanding contiguously into Odisha and Maharashtra. They currently have 10 branches in these new states and plan to add 10 more in FY26. Management emphasized that they are targeting border districts where the culture and credit habits are similar to their existing core markets, minimizing entry risk.

Operational Efficiency and Productivity Gains

The company is targeting significant productivity improvements to drive growth. They aim to increase the Average Ticket Size (ATS) from ₹8.5 lakhs to ₹9.5 lakhs without compromising LTV ratios. Additionally, they expect loan officer productivity to rise from 3.2 to 4 loans per month. Digital sourcing via their referral and construction ecosystem apps now accounts for 21% of business, with a target to reach 25-30%.

Asset Quality and Provisioning Philosophy

Despite a slight sequential increase in absolute Stage 2 assets (₹504cr to ₹507cr), the percentage fell from 4.93% to 4.72%. Management maintained a conservative Provision Coverage Ratio (PCR) of 1.03% by strengthening provisions in the NBFC subsidiary, which saw rapid book growth to ₹3,000 crores. Credit costs remained stable at 0.3% for the quarter, though guidance for FY26 is slightly higher at 40-45 bps to maintain buffers.

Interest Rate Sensitivity and Margin Outlook

Aptus maintains a unique position with an 80% fixed-rate loan book, while 56% of its borrowings are variable. This positioning allows them to benefit from a falling interest rate cycle, as borrowing costs will reprice downward while asset yields remain largely locked. Management expects NIMs to remain stable or improve as they negotiate harder on incremental bank borrowings and benefit from repo rate cuts.

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