AAVAS - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 19 Sept 25, 2:16 pm

Fundamental Rating: 3.9

Here’s a detailed breakdown of Aavas Financiers Ltd (AAVAS)

🧾 Core Financials

Profitability & Growth

Quarterly PAT declined from ₹154 Cr to ₹139 Cr, but YoY growth remains positive at 10.4%.

EPS: ₹74.2 — strong earnings per share for a mid-cap housing finance company.

ROE: 14.1% and ROCE: 10.1% — healthy, though slightly below top-tier NBFC benchmarks.

Debt & Liquidity

Debt-to-equity: 3.19 — high, but typical for housing finance firms leveraging long-term borrowings.

Dividend Yield: 0.00% — reinvestment-focused, common for growth-oriented lenders.

📊 Valuation Indicators

Metric Value Industry Avg Remarks

P/E Ratio 22.2 19.9 Slight premium

P/B Ratio ~2.99 ~2.5 Fairly valued

PEG Ratio 1.29 ~1 Slightly expensive on growth

Intrinsic Value ~₹1,500–₹1,600 — Near fair value

Valuation is reasonable, with PEG suggesting moderate growth expectations priced in.

🏢 Business Model & Competitive Edge

Core Operations: Affordable housing finance, primarily targeting underserved segments in Tier 2–3 cities.

Strengths

Strong underwriting and risk management practices.

Deep rural and semi-urban penetration with low delinquency rates.

Rising DII interest (+0.77%) signals domestic institutional confidence.

Risks

High leverage and interest rate sensitivity.

Slight decline in quarterly profits may reflect margin pressure.

📉 Technical & Entry Zone

Current Price: ₹1,648

DMA 50/200: ₹1,696 / ₹1,766 — trading below key averages.

RSI: 50.8 — neutral zone.

MACD: -14.8 — bearish crossover.

Suggested Entry Zone: ₹1,550–₹1,600 range, ideally near ₹1,517 support or below intrinsic value.

🕰️ Long-Term Holding Guidance

Hold if already invested, especially for exposure to affordable housing growth.

Good for fresh entry if price dips below ₹1,600.

Ideal for long-term only if

Loan book continues to grow >15% CAGR.

Asset quality remains stable and ROE sustains above 14%.

Would you like a peer comparison with Aptus Value Housing or Home First Finance?

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