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Despite being under pressure recently, Aptus Value Housing Finance India Ltd has received a ‘BUY’ recommendation from Choice Institutional Equities, which has initiated coverage on the affordable housing finance company with a target price of ₹330 per share. Against the last closing price of ₹223.30, the target indicates a potential upside of almost 48%. Including an estimated dividend yield of 2%, the expected total return stands at 50%.
The brokerage's positive outlook rests on the lender's growth prospects, technology-led operating model, strong profitability and ability to maintain relatively low credit costs. It expects Aptus to sustain annual growth of around 22% in assets under management (AUM) while delivering return on equity (RoE) above 20%.
The report stated, “We initiate coverage on APTUS with a ‘BUY’ recommendation. We value the company at 2.5x FY28E ABV (based on peer-group benchmarking for financial and operational metrics), resulting in target price of INR 330.0 per share," said the brokerage.
The housing finance stock has given weak returns to its investors in near term. It has lost 11% in 1 month, 24% in 3 months and 29% in the last 1 year.
In the long term as well, the scrip has been in the red, down 32% in the past 5 years.
Currently, the stock is almost 31% away from its 52-week high of ₹322.45, hit in November 2025. Meanwhile, it had touched its 52-week low of ₹193.50 in March 2026.
Aptus focuses on self-employed, first-time homebuyers and low- and middle-income customers in semi-urban and rural markets, particularly in southern India. Choice Institutional Equities believes the company operates in a relatively underpenetrated segment as banks reduce their presence in smaller-ticket housing loans.
The brokerage said, “APTUS scaled up its AUM by 20% every year since FY18, including COVID-19 period and, we believe, the pace of growth is repeatable. It serves self-employed, first-time home buyers, a segment banks continue to vacate.”
The company operates through an in-house branch network, which the brokerage believes supports customer acquisition, loan underwriting and collections. Aptus had 372 branches as of the first quarter of FY27. Choice noted that mature branches generated significantly higher AUM than newer ones, creating scope for productivity gains as the network expands.
Another factor supporting the investment case is the company's technology-led operating model. Despite increasing technology expenditure around tenfold since FY21, its operating expenses-to-AUM ratio remained within the 2.6–2.8% range. The brokerage expects this efficiency to continue as the lender scales up.
“APTUS earns the highest yield among listed AHFCs yet keeps cost among the lowest. This combination is driven by an in-house, technology-led operating model. Technology spend rose ~10x since FY21, yet opex-to-AUM stood at 2.6–2.8%,” it highlighted.
The report also pointed out that Aptus' lending yields and credit discipline. Its loan-to-value ratio of around 40% provides a cushion against potential losses, while in-house collections help manage delinquencies. Credit costs remained at 0.3–0.5% during FY23–FY26, although the brokerage expects some increase in the coming years.
Choice acknowledged that the company's net non-performing assets stood at 1.3%, among the higher levels in its peer group. However, it expects asset quality to stabilise with improving collections and the relatively low loan-to-value ratio.
On the earnings front, the brokerage expects 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.
Profit after tax is forecasted to increase from ₹1,110 crore in FY26 to ₹1,310 crore in FY27 and ₹1,550 crore in FY28. The brokerage expects return on assets to remain around 7.8%, while RoE is projected at 20.4% in FY27 and 20.7% in FY28.
However, Choice flagged risks including slower branch expansion, higher delinquencies in small-business lending and Karnataka, competitive pressure on lending yields, and lower assignment income.
Overall, the brokerage sees Aptus' growth potential and profitability as supportive of a higher valuation, although investors should weigh the identified risks before making investment decisions.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
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