Target: ₹624

CMP: ₹506.40

Aadhar Housing Finance Ltd has delivered a strong performance in Q1 FY26. NII remained steady q-o-q at ₹519.40 crore in Q1-FY26, rising 19 per cent y-o-y, supported by strong loan growth despite softer yields. NIM stood at 8.8 per cent, down 30 bps q-o-q and 10 bps y-o-y, as semi-urban expansion and higher liquidity offset funding cost pressures. PAT came in at ₹237.30 crore, up 19 per cent y-o-y but down 3 per cent q-o-q.

With cost-to-income improving to 36.1 per cent and credit cost guidance at 25-27 bps, management continues to target a 4.2-4.3 per cent ROA.

We expect better margins recovery and improvement in earnings through FY26 due to better branch productivity and access to cheaper and higher-rated liabilities.

We continue to remain bullish on Aadhar with a target price of ₹624 on FY27E ABVPS of ₹178 with a P/ABV multiple of 3.5x. Aadhar Housing is driving volume-led growth by expanding into underserved rural and semi-urban regions. Its dual-market strategy classifies branches as urban or emerging, enabling tailored offerings by market type. Supported by rising housing demand, urban migration, and policy momentum, Aadhar is aligning products, ticket sizes, and manpower to capture growth across varied geographies.

Published on August 11, 2025