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

ICICI Securities's research report on Aadhar Housing Finance

Aadhar Housing Finance (Aadhar) has successfully sustained >20% YoY (4% QoQ) AUM growth as disbursements grew 32% YoY in Q1FY26. Notably, spread expanded 10bps QoQ to 5.8% in Q1FY26 vs. 5.7% in Q1FY25. Its ability to deliver strong growth with industry-leading spreads, despite being one of the largest AHFCs, reinforces our view that credit demand in low-income housing remains robust, and the AHFC space will likely sustain its growth momentum ahead. Its judicious strategy of splitting the distribution network to aid growth/spread and deliver 17–18% RoE sets Aadhar apart from peers.

Outlook

Retain BUY; TP revised to INR 625 (vs. INR 550), valuing the stock at ~3.2x Sep’26E BVPS (prior: 3x).