Target: ₹1,678
Target: ₹1,369.85
India’s ₹5,300 crore affordable housing market is serviced by a mere 11 per cent of affordable housing finance companies (AHFC). Aavas Financiers’ management expects this space is set to post a market size CAGR of 32 per cent over FY22-25, backed by long-term structural trends.
Aavas Financiers with an ₹14,200 crore book, dominates with a 2.6 per cent market share as on FY22. It has the potential to reach a market share of 3.8 per cent by FY25.
We are enthused by AAVAS’ steps to stabilise top management and governance, and the cultural shift & the continued disciplined approach to the phygital business and its seasoned book. Risk management taking precedence over aggressive growth expansion will continue to aid asset quality.
A 25 per cent AUM CAGR & a NII CAGR of 20 per cent over FY23-25, a stable 2.8-2.9 per cent opex-to-assets ratio, a 5 per cent spread and an average GNPA of 1 per cent would translate into an earnings CAGR of 27 per cent, with a ROA of 2.9-3 per cent an average ROE of 16-17 per cent over FY23-FY25.
. We lower our TP to ₹1,678 from ₹2,815 as we pare down our multiple to 3.1x FY25 from 5.0x as AHFC are derated. We reiterate Buy.
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.