Aptus Value Housing Finance lends to self-employed households in Tier 3 and 4 towns, primarily in southern India, with housing loans two-thirds of the book and small business loans one-third. As of June 2026, AUM stood at INR 13,648 crore across 372 branches, with over 200,000 customers. The company earns a spread of 9% and expects net interest margins of 12.5-13%, while credit costs are guided at 0.5% plus or minus 10 basis points. That combination, with ROE above 20%, places it in the exceptional category for financial services, and unlike a typical commodity lender, it has a leading position in its niche, with competition but no dominant player having replicated its branch density in southern states.
The economics persist because the business is built on local relationships and underwriting that cannot be quickly replicated. Pre-closure rates run around 7-8% of AUM, but only about 2-2.5% of the book leaves via balance transfer to other institutions; the rest are customers paying off early from own funds, indicating low switching. Aptus also enjoys a funding cost advantage, borrowing from banks at 7.8-7.9% versus NHB rates of 8.2-8.3%, a gap enabled by its low leverage. Despite heavy field staff attrition of 40-45% due to poaching, the company has launched a connector channel that contributed 8% of Q1 FY27 disbursements, and it uses credit bureau, account aggregator, and ULI data to improve credit selection. The deliberate exit from sub-INR7 lakh loans, which fell from 17.5% of lending in April 2024 to roughly 10-11% of AUM by late 2025, is raising portfolio quality.
The inflection is branch expansion and the shift in customer profile. In FY27, management plans 60-70 new branches, with 33 already added in Q1, and it is scaling presence in Maharashtra and Odisha where competition is less intense. By mid-2028, assuming the 22-24% AUM growth guidance holds, AUM should be in the range of INR 19,000-20,000 crore, up from INR 13,648 crore in June 2026. Average ticket size is rising by INR 1 lakh per year, targeting the INR 10-20 lakh range, which improves productivity. The connector channel, piloted since January 2026, is expected to become a meaningful sourcing engine, while the runoff of the discontinued small-ticket segment will be complete within 15-18 months. Management also aims to keep spreads at 9% by reducing lending rates 50-75 basis points on incremental home loans, offset by lower borrowing costs; the impact on yield is less than 10 basis points.
Management's walk-talk has been mixed. In August 2025 they guided 28-30% AUM growth for FY26, then cut to 22-24% by February 2026, and have held that range through the May and August 2026 calls. The credit cost guidance of 0.5% has been met, and cost of funds declined to 8%, with spread improving to 9%. In May 2026, they reaffirmed the 22-24% growth and 60-branch plan, and Q1 FY27 delivered 36% YoY disbursement growth and 21% AUM growth. The INR 25,000 crore AUM target is still stated, though management acknowledged a possible delay of 1-2 quarters from the original FY29 timeline. There is no equity dilution; they raised INR 872 crore in Q1 via debt and securitization, and have INR 1,933 crore of liquidity.
The earnings path over the next two years depends on maintaining a 9% spread, a 2.6-2.8% opex-to-AUM ratio, and credit cost at 0.5%. With AUM growth at 22-24%, profit after tax should compound at a similar rate, building on FY26's INR 943 crore. The key falsifier is asset quality in the NBFC business, where 30+ DPD ticked up to 6.87% in Q4 FY26 before improving in July; if credit cost breaches 0.5% because of stress in SME or LAP loans, the spread and ROE are at risk. Also, competition in Tamil Nadu is causing field attrition, but the connector channel and branch expansion into less competitive states mitigate that. The single most important watchpoint is the stability of the spread: if cost of funds rises faster than the company can reprice, the 9% spread and 20%+ ROE will compress, and the 22-24% growth will generate diminishing returns.
companyname: Aptus Value Housing Finance India Limited ticker: APTUS sector: Affordable Housing Finance / Housing Finance Company (HFC) Aptus is a Chennai-based housing finance company, incorporated in 2009 and listed on BSE and NSE since August 2021. It lends to self-employed, low- and middle-income households in Tier 2, Tier 3, and Tier 4 towns across South India, with expansion underway into Maharashtra and Odisha. The business serves households "structurally excluded from mainstream banking...
Read the full report →capex, geographic expansion
AUM Growth: 22-24% for FY26
Guidance downgradedmixed
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