Aptus Value Housing Finance India rallied 8 percent to a high of Rs 321.35 on the BSE in Thursday’s intraday trade, even as the broader markets remained under pressure owing to global cues.
At 11:30 AM, the stock quoted 5.6 per cent higher at Rs 314. The counter witnessed a volume of around 74,000 shares as against its two-week daily average traded volume of around 49,000 shares on the BSE. Meanwhile, the S&P BSE Sensex was down 0.8 percent at 58,987.
Recently, the Citi group had initiated coverage on the stock, with a ‘Buy’ rating and a target price of Rs 425 per share.
According to the report, Aptus which operates in the niche affordable-housing segment has demonstrated quality underwriting, with credit cost less than 20 bps pre-Covid and peak of 86 bps after Covid.
The report states that pricing power and efficient cost structure helped the company deliver healthy ROA (7.4 percent in FY22), although low average (assets/equity 2X as on June 2022) limits ROE.
That apart, ta more non-salaried customer segment, high share of non-housing loans and high pricing power in its geographies help Aptus drive higher-than-peers NIM. And, the low-cost/ assets drives higher ROA/ ROE.
Any change in senior management, impact of expansion into new states on profitability and geographic concentration in selected states, are some of the key risks highlighted by the report.