Choice Institutional Equities has initiated coverage on Aptus Value Housing Finance with a 'Buy' recommendation and a target price of ₹330. According to reports from LiveMint, the brokerage values the company at 2.5x FY28E ABV based on peer-group benchmarking. The current market price stands at ₹223.30, indicating potential upside of approximately ₹106.70 from current levels. Including an estimated dividend yield of 2%, the expected total return stands at 50%.
The company demonstrates exceptional profitability metrics, with estimated return on asset (RoA) of 7.8 per cent and return on equity (RoE) of 20.4/20.7 per cent for FY27E/FY28E respectively. As reported by LiveMint, Aptus Value Housing delivered over 20 per cent RoE in FY26 despite operating with a ₹10 lakh ticket size and a branch-heavy model. The company's 9.1 per cent spread represents the widest among peers, reflecting strong underwriting and cost discipline. Choice Institutional Equities expects the company to sustain annual AUM growth of around 22% while delivering RoE above 20%.
Choice Institutional Equities believes Aptus operates in a relatively underpenetrated segment as banks reduce their presence in smaller-ticket housing loans. The brokerage noted that APTUS scaled up its AUM by 20% every year since FY18, including the COVID-19 period, and expects this growth pace to be repeatable. The company's technology-led operating model is particularly impressive, with operating expenses-to-AUM ratio remaining within the 2.6–2.8% range despite increasing technology expenditure around tenfold since FY21. Aptus operates 372 branches with AUM of about ₹13,700 crore as of Q1 FY27, with mature branches generating significantly higher AUM than newer ones.
The company maintains a net NPA of 1.3 per cent, which is among the highest in the peer set, but is expected to stabilise on improving collections and approximately 40% LTV. According to LiveMint, Choice Institutional Equities expects asset quality to stabilise with improving collections and the relatively low loan-to-value ratio. The brokerage projects AUM to increase from ₹13,110 crore in FY26 to ₹19,540 crore in FY28, implying a compound annual growth rate of 22.1%. Net interest income is projected to rise from ₹1,300 crore to ₹1,830 crore over the same period, while profit after tax is forecasted to increase from ₹1,110 crore in FY26 to ₹1,550 crore in FY28.
The housing finance stock has experienced significant pressure in recent months, losing 11% in 1 month, 24% in 3 months and 29% in the last 1 year. Currently, the stock is 31% away from its 52-week high of ₹322.45 hit in November 2025, while it had touched its 52-week low of ₹193.50 in March 2026. Choice Institutional Equities identifies several key risks including slower branch expansion, higher delinquencies in small-business lending and Karnataka, competitive pressure on lending yields, and lower assignment income. The company serves self-employed, first-time homebuyers and low-and-middle-income customers in semi-urban/rural South India through home loans, LAP, and small business loans.
