Buy Aadhar Housing Finance; target of Rs 625: ICICI Securities

ICICI Securities's research report on Aadhar Housing Finance

Aadhar Housing Finance’s (Aadhar) credit discipline, robust risk management and geographically diversified AUM (no state has <15% of AUM) helped it in delivering one of the best asset quality performances in Q2FY26 despite challenges. Stage 2 assets moderated to 3.5% vs. 3.7% QoQ, 30+ DPD fell 5bps QoQ to 4.6%, and credit cost moderated sharply to 19bps vs. 41bps QoQ. Management attributes this to its low exposure in some stress pockets like Tirupur, Coimbatore, Surat (combined exposure is ~1.6-1.7% of total AUM as on Sep’25) and robust collection mechanism (total 1,500 collection people). Notably, disbursements growth remained strong at 16% YoY during H1FY26 and it maintained its full-year FY26 disbursements growth target of 18-20% YoY.

Outlook

Retain BUY with an unchanged TP of INR 625, valuing the stock at ~3.2x Sep’26E BVPS.