Prabhudas Lilladher Suggests "Accumulate" This Midcap NBFC Stock, Trading Near 52-Week Low

Prabhudas Lilladher has assigned an "Accumulate" rating to the stock of AAVAS Financiers, a midcap NBFC, with a target price of Rs 2,200 apiece. The brokerage claims a potential upside of up to 11% return considering the given target price and the current market price of the stock. The company is primarily engaged in the business of providing construction loans, Business loans, loans against property, and home improvement loans. It has a market valuation of Rs 15,722.91 crore. Below are the key details about the stock from the report:

AAVAS Financiers Stock Performance

The current share price of AAVAS Financiers Ltd stock on BSE is Rs 1,985.10 apiece, down 0.58% from the previous close of Rs 1,996.75 apiece. The stock hit a 52-week low on 6 January 2023 at Rs 1,697.55 apiece, 16.94% up. It recorded its 52-week high on 4 February 2022 at Rs 3,210 apiece. The stock was listed on the exchange on 8 October 2018. Since its listing, it has given a 156.89% positive return. In the past 1 week, it surged 6.94%. In the past 1 month, it surged 13.88% and in 3 months it surged 4.97%, respectively. The stock fell 34.87% in the past 1 year. It gave 1.8% in the past 3 years. 

Prabhudas Lilladher Recommends "Accumulate" the AAVAS Financiers' stock

Prabhudas Lilladher said, "We cut FY23/24/25E earnings by ~2% due to higher opex, as company's focus would be on 1) digital transformation and 2) 23-25% AuM growth. AAVAS Financiers (Aavas) saw a steady quarter with earnings being exactly in-line at Rs1.07bn. NII beat PLe by 6.6%. While AuM growth at 4.3% QoQ was lower, NIM was better due to higher yields as growth in non-HL was strong at 7.2% QoQ. Opex was a tad higher and would remain elevated given digital focus (outlay of Rs1.2-1.5bn) and likely branch addition of 30-35 branches per annum. We see opex/assets to remain at ~3.3% over FY23-25E (3.2% in FY23). To focus on long-term strategy and day-to-day execution MD/CEO roles are split. Hence, new CEO Mr. Bhinder will focus on people and technology. We trim our multiple from 4.6x to 4.5x on Sep'24 ABV to arrive at a TP of Rs2,200 (earlier Rs2,250). Due to competition Aavas' multiple could be capped; maintain 'ACCUMULATE'."

Disclaimer

The stock has been picked from the brokerage report of Prabhudas Lilladher. Greynium Information Technologies, the Author, and the respective Brokerage house are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to consult with certified experts before making any investment decision.