Shares of Aptus Value Housing Finance climbed 3% in intraday trade on Monday, 29 June, reaching an intraday high of ₹273.25 before paring some gains. According to reports from Mint, the stock was trading 1.40% up at ₹268.80 around 2:15 pm, while the equity benchmark Sensex was 0.48% down at 76,729 at that time. The NBFC stock has demonstrated strong recent performance, with shares jumping over 35% in the last three months and gaining more than 3% so far in June. The stock's performance came even as market sentiment remained cautious amid a rise in crude oil prices due to fresh escalation in tensions between the US and Iran.
Despite the recent gains, year-to-date performance shows mixed results for the housing finance company. As reported by Mint, the stock is down nearly 5% compared to a 10% fall in the benchmark Sensex. The stock has experienced significant volatility throughout the year, hitting its 52-week low of ₹193.50 on 30 March this year after reaching a 52-week high of ₹364.85 on 21 August last year. The current trading level of ₹268.80 represents a recovery from recent lows, with shares having been enjoying healthy buying interest of late.
Global financial firm Citi has issued a buy recommendation on Aptus Value Housing Finance with a target price of ₹350, implying a 32% upside from the stock's previous day close of ₹265.10. According to Citi's analysis reported by Mint, the target price is based on a two-stage Gordon Growth model with key assumptions including cost of equity of 13.3%, normalised RoE of 18%, growth during stage one of 20%, and steady state growth of 4%. The target multiple is set at 2.7 times September 2027E BVPS. As per Citi, with its niche segment focus and strong internal processes, Aptus has delivered strong, profitable growth for a long period. The company has among the highest ROA (return on assets) and ROE (return on equity) in the affordable housing finance space, driven by high NIM (net interest margin) and a low-cost operating model.
According to Citi's latest analysis, Aptus is expected to demonstrate robust operational performance with disbursement growth estimated to re-accelerate sharply to 34% year-on-year compared to 18%/11%/3% in Q4/Q3/Q2. Q-o-Q AUM growth is expected to breach 4.5%, driven by higher ATS, accelerated branch rollouts, and strengthening network productivity. YoY AUM growth is anticipated to step up to 21.5%, improving line-of-sight to the guided corridor of 22-24%. Citi expects assets under management (AUM) to grow by more than 4.5% sequentially, supported by higher average ticket sizes, faster branch additions and improving productivity across its distribution network. Despite seasonality, GS3/1+ DPD are expected to edge up 13-15bps/40-45bps quarter-on-quarter to 1.65%/6.65%, while credit costs are expected to remain firmly within the guided band of 0.5% (plus or minus 10bps).
According to Citi's latest report, Aptus Value Housing Finance has entered the brokerage's 30-day upside Catalyst Watch, with the firm reiterating its 'Buy' rating and target price of ₹350. If including an expected dividend yield of 1.5%, Citi sees a total return potential of 33.4%. The brokerage's constructive near-term view is driven by expectations of a sharp acceleration in disbursement growth, stable asset quality, resilient lending spreads and attractive valuations ahead of the company's quarterly earnings. Citi expects Aptus to maintain stable lending spreads as borrowing costs and portfolio yields remain largely unchanged. The brokerage also believes the stock's valuation remains attractive, trading at around 1.9 times FY28 estimated book value and below 10 times FY28 estimated earnings despite generating around 20% return on equity.
