Broker’s call: Aadhar Housing (Buy)

Source: Company website
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BL companies

Target: ₹550

CMP: ₹462.90

Established in 2010, Aadhar Housing Finance is the largest player in affordable housing space with AUM of ₹23,975 crore. Diversification in terms of business mix, customer base and distribution remain core strength.

Business mix remains well balanced and granular with home loans comprising about 75 per cent of AUM, while LAP constitutes remaining 25 per cent. Salaried borrowers mix comprised 56 per cent salaried and 44 per cent self-employed segments of AUM.

As of December 31, 2024, Aadhar operates 557 branches across 21 states and union territories

Aadhar remains an attractive play in the affordable housing finance segment with a robust business model combining efficiency, stability and prudent underwriting practice, leading to healthy and sustainable performance across cycles. Expect AUM growth to sustain at about 19 per cent, while steady asset quality and gradual improvement in margins and efficiency is expected to result in earnings CAGR of about 23 per cent in FY25-27E.

Given its strong RoA of 4% and RoE of 18%+, while delivering credit growth of above 20 per cent, valuations remain attractive at current level. We value Aadhar at 2.7x FY27E BV and assign a target price of ₹550. We recommend a Buy rating.

Published on April 11, 2025