Aavas Financiers Q4 Results Review - Disbursement Up 39% QoQ: ICICI Securities

ICICI Securities Report

Strong 22% YoY asset under management growth in FY24 with an all-time low 1 plus days past due portfolio at 3.1%, as on March 2024, despite higher attrition owing to top-management change in May 2023 and adverse impact on business volume due to tech upgradation, summarises superior execution of business strategies by new management.

Further, Aavas Financiers Ltd. sounded confident about sustaining strong disbursement momentum in FY25 and expects 22%-25% AUM growth in near term. Management also highlighted that bringing down cost-to-assets below 3% remains key strategic priority in near-term.

We maintain 'Buy' with a revised target price of Rs 1,900, valuing it at 3.2 times (3 times earlier) September ’25E book per share as we believe Aavas would maintain its industry-leading position in the affordable housing finance company space and deliver ~3–3.5% return on asset and 15–18% return on equity on a steady-state basis.

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