Latest News

• Aavas Financiers share price tumbled around 8% on March 5 to hit a 52 week low of Rs. 1321
• The promoters sold the shares worth Rs.1369 crores in the open market.
• Where as good news is that Mutual Funds bought shares worth Rs.1186 Cr.
• SBI Mutual Fund acquired 63,00,000 shares, or a 7.96 percent stake at an average price of Rs 1370.
• Amansa Holdings bought 23,59,350 shares or 2.98 percent stake at Rs 1370 per share.

• Shares of Aavas Financiers had risen in early February after finance minister Nirmala Sitharaman announced a massive housing push in the interim Budget 2024.
• The government’s plan to launch a scheme to build two crore houses  in the next five years under the Pradhan Mantri Awas Yojana (Grameen) is seen as a growth driver for the company.

Aavas Financiers Share Price

Aavas Financiers made all time high at 3020 level on Feb 2022 but as of today March 2024 after 2 years share plunges to its 52 week low of level 1381. In the span of 2 years share tumbled by 55%  & made its 52 week low.

Over the period of 5 years, company has generated only 16.46 % returns to its investors which seems to be very disappointed.

About Company

Business Overview

• Company is registered as a Housing Finance Company
• Provides loans to customers belonging to low and middle income segment in semi-urban and rural areas who may or may not have the income proof documents like IT return, salary slip

Geographical Footprints

Company has operations in Rajasthan, Maharashtra, Gujarat, Madhya Pradesh, Haryana, Uttar Pradesh, Chhattisgarh, Punjab, Uttarakhand, Himachal Pradesh, Delhi, Odisha, and Karnataka, with a total of 346 branches

Services Offered

1. Purchase of under construction of ready to move flats
2. Finance for Construction- Offer loans for construction on a plot of land, which has been already acquired
3. Finance for Home Extension– Offer loans to individuals for extension of an existing home unit
4. Others– Special Urban Low Income Housing Product and Specific Women Ownership Product, Scheme for Low Income Households and Refinance Scheme for Women

Revenue Mix

Loan Break-up

Customer Segment

Fundamental Analysis

Market Cap	₹ 10,896 Cr
Current Price	₹ 1,377
High/Low	₹ 1,840/1,321
Stock PE	23
Book Value	₹ 444
ROCE	9.51%
ROE	14.1 %
Sales Growth 5 years	26.6 %
Debt To Equity	3.19

Shareholding Pattern

Change in shareholding pattern

	Dec-20	Sep-23	3 year Change
Promoters	50.15%	39.11%	-11.04%
FIIs	31.03%	35.49%	4.46%
DIIs	9.38%	14.13%	4.75%
Public	9.44%	11.24%	1.80%

If we look at the change in the shareholding pattern, we can see a significant change though the promoters are selling the stake in the company but FII’s & DII’s are buying the majority of the stake. This indicates that FII’s & DII’s are optimistic about the company growth & so the retail investors.

Financial Trend

• Company’s revenue has more than doubled from 710 Cr to 1608 Cr over the period of 5 years.
• 5 year Net Profit growth stands at 144% means it increase from 176 Cr  430 Cr.

Company Valuation

Though the company is consistently increasing it’s revenue & net profit over the last 10 years but it is not reflecting in the stock price itself. So to say Fundamentals of the company are really strong, market share is increasing & the government policies are getting positively impacted to the company but still company has generated only 16% returns to its investors.

Price to Earning Ratio

If we look at the company’s 5 years Median PE which stood at 48.2 level & as on today March 2024, Current PE stood at 27.2 level. So the difference is pretty clear company is trading at a 5 years lower valuation. Company is at a discounted price to accumulate.

What should Investors  do ?

• Housing loan market is continuously increasing in India at a CAGR of 25% & the Government’s policy is also  supporting to the company’s growth, hence there is huge potential in the company
• Company is trading at discount to 5 years historic valuation, very good chance to buy at the right point.
• Revenue & Net profit are consistently increasing & so the stock price will increase
• After the RBI Repo rate cut mostly in 2024 end, lending will be easier so the growth will become faster.

Disclaimer

This article is a complete guide about Aavas Financiers Ltd.
These information and forecasts are based on our analysis, research, company fundamentals and history, experiences, and various technical analyses.
Also, We have talked in detail about the share’s future prospects and growth potential.
Hopefully, this information will help you in your further investment.
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