Buy Aadhar Housing Finance; target of Rs 550: ICICI Securities

ICICI Securities research report on Aadhar Housing Finance

Aadhar Housing Finance (Aadhar) has carved a niche for itself in affordable housing finance, pioneering the space as a category creator, armed with its distinct business-scaling strategy. As the industry chose safer shores of credit-tested markets in south and west India, Aadhar established its inaugural branch in Uttar Pradesh (UP) – uncharted territory for affordable housing finance; and what stands out is its focus on diversification. As on Mar’24, India’s largest state, Maharashtra, accounted for only 14% of its AUM vs. peers' single-state contribution of >30%. Aadhar’s execution credentials also set it apart; among AHFCs, Aadhar’s: 1) INR 211bn AUM (Mar’24), is preeminent; and 2) FY24 RoE, at 18.4%, is notable.

Outlook

We initiate coverage with a BUY rating and TP of INR 550, valuing Aadhar at ~3x FY26E BVPS.