Buy India Shelter Finance Corporation; target of Rs 850: ICICI Securities

BUY

ICICI Securities's research report on India Shelter Finance Corporation

Steady traction in earnings for India Shelter continued in Q3FY25 with RoE further expanding 30bps QoQ to 15.1%. Robust AUM growth at 8% QoQ, steady spread at >6% and stable credit cost QoQ were primary drivers of Q3 earnings growth of 7% QoQ / 54% YoY. Robust technology with one of the lowest TAT and end-to-end digital loan process without any physical movement of loan file are key enablers of industry-leading growth. We believe higher proportion of LAP portfolio (40% of AUM), resulting in better spreads than peers, ~60% fixed rate loans (dual advantage of low BT-out and better yields during downward interest rate cycle) would help India Shelter in sustaining better profitability than peers.

Outlook

Maintain BUY with TP of INR 850, valuing the stock at 3.2x on Sep’25E BVPS.

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India Shelter Finance Corporation_10022025_ICICI Securities