Bernstein has initiated coverage on a clutch of affordable housing finance companies with an optimistic tone on three of the four lenders, citing growth visibility, product flexibility and operating efficiency as key drivers. The brokerage has rated HomeFirst, Aptus Value Housing, and Aadhar Housing Finance as ‘Outperform’, while it has a more cautious ‘Market Perform’ stance on Aavas Financiers.
The note comes at a time when the affordable housing finance space is drawing investor attention thanks to policy tailwinds, falling interest rate expectations, and rural demand recovery.
For HomeFirst Finance, Bernstein has set a target price of ₹1,650, stating that the company’s ability to replicate its highly efficient operating model across states positions it well for multi-year compounding. The brokerage highlights its strong growth trajectory, superior productivity, and lean cost structure, suggesting that HomeFirst benefits from the flexibility afforded by its smaller size and nimble execution.
Bernstein is also bullish on Aptus Value Housing, with a target price of ₹400, citing the company’s focus on fixed-rate loans and small business lending, which makes it better placed than peers in a falling rate environment. Aptus’ low loan-to-value ratio and conservative underwriting also add to its appeal, with the brokerage calling its valuation “reasonable.”
Among the three outperform-rated names, Aadhar Housing Finance is viewed as a diversified proxy for the affordable housing opportunity. With presence across multiple states and a steady execution track record, Bernstein expects Aadhar to maintain a 20% AUM CAGR, backed by operating leverage and asset quality stability. The brokerage has set a target of ₹550 for Aadhar.
However, the note strikes a more cautious tone on Aavas Financiers, assigning it a ‘Market Perform’ rating with a target price of ₹2,070. While the company has been a steady performer historically, Bernstein notes that Aavas has lagged peers on yield and profitability metrics, and has witnessed a slowdown in growth recently. The brokerage warns that inconsistent results from geographic expansion efforts remain a concern and weigh on its long-term outlook.
With housing finance emerging as a key beneficiary of India’s formalisation and home ownership push, the report suggests that the competitive moat now hinges on execution, cost control and product-market fit rather than just AUM growth. Bernstein’s picks signal investor preference for nimble and diversified models with scalable moats in Tier 2/3 cities.
