Citi has reiterated its buy rating on Aadhar Housing with a target price of ₹650 per share, indicating an upside of about 20 percent from the current market price of ₹540.40.
The brokerage, after its management meet, highlighted that Aadhar Housing is strategically positioning itself as a low-income housing financier with an average ticket size of less than ₹1.5 million. The company is reorienting its distribution strategy across distinct ‘Urban’ and ‘Emerging’ markets, with the former targeting AUM growth with better credit quality and the latter focusing on value and enhanced risk-adjusted returns.
Citi noted that Aadhar Housing is confidently targeting 20–22 percent AUM growth over the medium term, supported by disbursement growth of 17–20 percent. Realised funding cost benefits are expected to be passed on, with stable medium-term spreads of around 5.5 percent.
The brokerage also pointed out that credit cost outlook remains benign at 25–28 bps, supported by stable bounce rates. Management is adopting a cautious approach in select states such as West Bengal, Kerala, Odisha, Bihar, and Jharkhand. Additionally, initiatives such as a fresher apprenticeship program and a 4.7 percent ESOP pool are helping address attrition and drive retention.
At current valuations, Aadhar Housing trades at 2.6x FY26E book, with a return profile of over 4.4 percent RoA and 16 percent RoE, which Citi believes supports its bullish stance.
Disclaimer: The views and recommendations expressed in this article are those of Citi. This publication does not provide investment advice. Readers are advised to consult certified financial advisers before making any investment decisions.
