The stock of housing finance company has outperformed the market by surging 13 per cent since January 30, after it reported a healthy result for December 2018 (Q3FY19). In comparison, the S&P BSE Sensex was up 1 per cent during the same period.
Aavas Financiers (formerly known as Au Housing Finance), is a retail, affordable housing finance company, primarily serving low and middle-income self-employed customers in semi-urban and rural areas in India. The Company’s product offering consists of Home loans for the purchase or construction of residential properties, and for the extension and repair of existing housing units.
Aavas Financiers reported a more than doubled net profit at Rs 56 crore in Q3FY19 against Rs 25.9 crore in a year ago quarter. Net interest income (interest income minus interest expenses) was up 73 per cent year-on-year (YoY) to Rs 1,239 crore from Rs 717 crore during the quarter. The company reported high disbursement growth in Q3FY19 of 38 per cent YoY to Rs 711 crore from Rs 516 crore in the corresponding quarter of previous fiscal.
Assets quality improved with gross non-performing assets (NPAs) improved by 24 basis points to 0.58 per cent and net NPAs is 0.49 per cent improved by 21 bps of the outstanding loan book as on December 31, 2018.
The company said its strategy of focusing on funding of purchase and construction of single unit dwellings of small average ticket size for self-occupation is playing out well.
The management of the company is risk averse and has conservatively built their existing portfolio with Zero exposure to developer finance, under construction properties else land financing. Around 85 per cent of house funded by the company are solo structure houses whereas balance are apartments. The company also has categorically avoided customers directly linked to Agriculture else dairy activities in order to avoid volatile revenue model.
Aavas Financiers promoters held 58.29 per cent stake in the company. Out of 41.71 per cent public shareholding, institutional investors held 31.24 per cent stake, while individual shareholders held 9.38 per cent holding in the company, shareholding pattern data shows.
In the past three months, it rallied 35 per cent from the level of Rs 689, as compared to 1 per cent gain in the benchmark index. The stock had made a weak debut, as the scrip got listed at Rs 750, 9 per cent below its issue price of Rs 821 on the BSE.
At 10:19 am; Aavas Financiers was trading 1.7 per cent higher at Rs 922, against 0.66 per cent rise in the S&P BSE Sensex. A combined 18,364 equity shares changed hands on the counter on the BSE and NSE.