HomeFirst, Aptus, Aadhar Housing gain up to 5% as Bernstein initiates with ‘Outperform’ rating

Bernstein expects Aadhar Housing to maintain a steady growth trajectory of around 20 percent AUM CAGR.

Shares of housing finance companies rose by up to 5 percent on July 10 after Bernstein initiated coverage on four listed firms with a largely positive view on the sector, citing structural growth opportunities and business model resilience.

The brokerage has rated HomeFirst Finance (up 5.4%), Aptus Value Housing (up 2%), and Aadhar Housing Finance (up 1%) as ‘Outperform’, while assigning a ‘Market Perform’ rating to Aavas Financiers (down 1%).

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For HomeFirst Finance, the target price is set at Rs 1,650 per share, implying an upside potential of 22 percent from the last close on the NSE. The international brokerage highlighted the company’s ability to replicate its operating model across multiple states consistently. Its smaller size allows for faster growth and better productivity metrics, which gives it more flexibility to sustain profitability compared to peers.

Aptus Value Housing received a target of Rs 400 per share, implying an upside potential of 17 percent from the last close of Rs 342 on the NSE. Bernstein noted that the company’s higher share of fixed-rate loans and exposure to small business lending positions it well in a falling interest rate environment. Valuations were seen as reasonable.

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Aadhar Housing Finance was assigned a target of Rs 550 per share. This implies an upside of 22.5 percent from the last close on the NSE. As the largest and most geographically diversified player among peers, Bernstein expects it to maintain a steady growth trajectory of around 20 percent AUM CAGR.

Aavas Financiers, however, was rated ‘Market Perform’ with a target of Rs 2,070 per share. The brokerage forecasts an upside of 5 percent from the last close. Bernstein pointed to weaker yield and profitability metrics, a recent slowdown in growth, and inconsistent outcomes from geographic expansion as reasons for its more cautious stance. A near-term rebound is possible, the brokerage added.

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