| Q2 and H1 FY26 Earnings Conference Call
Summary : Aptus Value Housing Finance reported strong Q2/H1 FY26 financial performance, strategically shifting to higher ticket sizes and expanding operations, while managing increased credit costs from a policy change.
Management Perspective positive : "We are very confident of pursuing this 25%+ run rate AUM.""Our ROA and ROE... is one of the best in the industry.""We have seen good progress across each initiative.""We are very confident of achieving this goal."
Concall Report Analysis & Insights
Business Overview
- Q2 FY26 disbursements grew 24% Q-on-Q to INR963 crores.
- H1 FY26 disbursements grew 8% Y-on-Y.
- AUM grew 22% Y-o-Y and 4% Q-o-Q.
- Total income increased 27% Y-o-Y to INR554 crores.
- Profit grew 24% to INR227 crores, with ROA of 7.9% and ROE of 20%.
Future Growth Prospects
- Vision to reach INR25,000 crores AUM in the medium term.
- Aim to sustain 25%+ growth through expanding footprint and execution.
- Expanding presence in Maharashtra and Odisha with encouraging early experience.
- Planning to add 40 new branches, 20 already added in Q2.
- New ZIVA software stabilized, enabling scalable growth and efficiency.
Management Insights
- "We are very confident of pursuing this 25%+ run rate AUM."
- "Our strategy continues to revolve around 4 key pillars."
- "We have taken a call not to log in any loan of a size lower than INR7 lakhs."
- "We are very confident of not maintaining, improving the 20% ROE."
- "Our credit cost has moved up from 20 basis points to 50 basis points."
Signs of Skepticism
- Analyst questioned if credit cost increase is a one-off or ongoing.
- Analyst questioned why disbursement growth is weaker than expected.
- Analyst asked about the impact of policy changes on blended yields.
- Management was reluctant to share specific monthly disbursement figures.
Risk Factors
- Disbursement growth influenced by increased minimum login ticket size.
- Temporary weather-related disruptions impacted Q2 disbursements.
- Credit cost increased to 50 basis points due to accounting policy change.
- Short-term impact on disbursement growth from new loan size policy.
Good To Know
- Mr. Balaji, ED & CBO, was absent due to a family medical emergency.
- Company broadened and diversified institutional shareholding.
- New loan origination system, ZIVA, has stabilized across branches.
- Strengthened collections at state and HO levels to reduce GNPA.
- Maintained strong liquidity of INR1,700 crores, including undrawn bank sanctions.
Key Drivers
- Expanding branch network and reach.
- Digital process efficiency (ZIVA).
- Focus on higher quality customers.
- Strong operational excellence culture.
Key Analyst Discussions
Market Trends & Consumer Behavior
- Impact of temporary weather-related disruptions on disbursements.
- Management's focus on improving customer profiles and loan quality.
Financial Highlights
- Questions on credit cost changes due to new write-off policy.
- Inquiries about the impact of policy changes on P&L.
- Discussions on borrowing cost improvement and liquidity.
- Clarification on AUM growth and repayment run rates.
Product Composition
- Questions on stopping disbursements below INR7 lakh ticket size.
- Discussion on the current proportion of this portfolio in AUM.
- Inquiries about the impact on blended yields from higher ticket sizes.
- Clarification on average ticket size progression (INR9L to INR12L).
Strategic Considerations
- Confidence in achieving INR25,000 crores AUM target.
- Strategy for branch expansion and ZIVA software impact on growth.
- Philosophy and quantum of direct assignment transactions.
- Rationale for moving away from micro-finance type customer profiles.