Aptus Value Housing Q2 Results Review - Spreads Stable; Asset Quality Strengthens: Dolat Capital

Dolat Capital Report

Aptus Value Housing Finance India Ltd. reported a strong quarter with robust assets under management growth at 7% QoQ and 33% YoY, decline in gross non-performing asset by ~30 basis points QoQ to 1.47%, stable 30 plus days past due at 6.3% (down 20 bps QoQ), and industry best return on asset at 7.6% (calculated).

Total expected credit loss provisions have been raised to 1% of advances (0.9% earlier), with doubling of provision cover against stage-II assets (at 6%) versus previous quarter.

Spreads were largely stable in H1 FY23, aided by moderation in cost of fund, even as yields were impacted by rising HL share. Employee costs increased sharply (up 38% YoY) led by higher variable component owing to robust disbursements (up 43% YoY).

We continue to build in superior return on asset metrics at ~7% led by its industry best margins, contained opex and limited credit costs.

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