Aptus Value Housing Finance

Target: ₹350

CMP: ₹217.80

Aptus leads the sector on EPS growth at 25 per cent year on year (Q326 TTM), outpacing larger NBFC peers such as BAF (12 per cent), Aavas (11 per cent) and L&T Finance (9 per cent).

RoA stays healthy at 7.3-7.4 per cent and NIM at 10.9 per cent, with a cost-to-income ratio of about 20-21 per cent — among the best in the sector.

AUM growth guidance is revised to 22-24 per cent for the near term, with a medium-term aspiration of ₹25,000 crore by FY29 (about 2x current levels); Aptus plans to open 60-70 new branches in FY27 with a deliberate focus on new-State expansion.

Aadhar Housing Finance

Target: ₹600

CMP: ₹471.65

AUM grew 21 per cent year on year in Q326, broadly in line with its historical average; the management guides for 18-20 per cent AUM growth in FY27, supported by improving branch vintage and a planned addition of 40-50 new branches.

Aadhar’s diversified geographical presence — no single State exceeding 15 per cent of AUM — and limited direct MFI customer exposure provided meaningful insulation from microfinance stress and tariff-related disruptions.

We highlight Aadhar as one of our top picks in the AHFC segment, citing its diversified geographical presence and proven ability to scale its model successfully across geographies.

The prevailing macro concerns have triggered a broad-based sell-off across Indian banks and NBFCs, and affordable housing finance companies (AHFCs) have not been spared. However, beyond now-attractive valuations, we see several compelling reasons to turn constructive on the segment, driven by an impending inflection in both growth and asset quality.

Further, relative to NBFC peers, stronger liability profiles — supported by longer-tenor borrowings and access to NHB funding — along with the inherently-secured nature of assets and the relatively smaller scale of these franchises, make AHFCs an attractive segment to own in the current environment.

AHFCs have seen a sharp moderation in disbursement growth over the past 12 months, broadly in line with prime mortgages. This, along with asset quality concerns—driven by potential spillovers from microfinance as well as idiosyncratic factors (e.g., tariff impact across select industries/geographies)—has led to a meaningful derating across the space. We believe both growth and asset quality are now approaching an inflection point. Q3FY26 results provide early evidence: disbursement growth has shown sequential improvement, while early-stage delinquency indicators have begun to stabilise or improve for most lenders.

This reinforces our constructive long-term view on the affordable housing theme, and we see the current correction as a favourable entry point. We maintain our Outperform ratings on Aptus and Aadhar.

Published on April 9, 2026