Aadhar Housing Finance shares recently rose 8.5%, reaching an all-time high of ₹503.40 on September 23. This increase reflects a remarkable 72% gain from its 52-week low of ₹293.35 recorded on May 15, just four months earlier.
The stock opened at ₹478.25 and closed at ₹499.30, showcasing a significant rise from its previous close of ₹464.05.
Analyst Recommendations
Analysts are optimistic about Aadhar’s growth potential. JM Financial has initiated coverage with a buy rating and a target price of ₹600, suggesting a 29% upside from the stock’s close on September 20.
Meanwhile, Kotak Institutional Equities has also issued a buy rating with a target price of ₹550. Both firms highlight the company’s strong position in the affordable housing finance sector.
Growth Drivers
Experts believe Aadhar Housing is well-positioned to benefit from the ongoing momentum in the housing finance market. The company’s diverse client base, which includes both salaried and self-employed individuals, along with its geographic reach across 21 states, contributes to its growth prospects.
Jignesh Shial from InCred Capital notes that Aadhar’s balanced strategy and efficient operations provide a favourable risk-reward scenario.
Operational Efficiency
Aadhar’s graded branch expansion strategy allows it to establish a presence in smaller towns while utilizing technology and its Aadhar Mitra lead generation channel to enhance operational efficiency.
Analysts expect the company’s margins to remain stable, even as India enters a potential interest rate cut cycle, due to its well-matched asset-liability management.
Financial Projections
JM Financial projects that Aadhar Housing will achieve an earnings per share (EPS) compound annual growth rate (CAGR) of 26% from FY24 to FY26, driven by a 23% CAGR in assets under management (AUM).
This growth is expected to be supported by steady margins and low credit costs. The anticipated return on assets (RoA) is projected at 4.3% for FY25 and 4.5% for FY26, with returns on equity (RoE) remaining strong at around 17%.
Conclusion
Aadhar Housing Finance stands out in the affordable housing finance sector due to its larger balance sheet, extensive operational history, and strong return metrics.
The recent surge in share price and positive analyst outlook suggest that Aadhar is poised for continued growth, making it an attractive option for investors looking to capitalize on the thriving housing finance market.
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Disclaimer
The information provided in this article is for informational purposes only and should not be considered financial advice. Always consult with a qualified financial advisor before making any investment decisions. Neither the author nor the website assumes responsibility for financial outcomes based on this content.
