Kotak Institutional Equities has initiated coverage on Aadhar Housing Finance with a “Buy” rating, setting a target price of ₹550 per share, implying a 41% upside from current market price of Rs 389 per share. The brokerage highlights Aadhar Housing as a major player in the affordable housing finance sector, with assets under management (AUM) of ₹211 billion in FY2024, accounting for a 7% market share in this segment.
Kotak Institutional Equities is optimistic about Aadhar Housing’s growth prospects, projecting a 21% compound annual growth rate (CAGR) in AUM from FY2024 to FY2027. This growth is expected to be driven by the company’s multipronged expansion and appraisal strategy, which aims to capitalize on the increasing demand for affordable housing finance across diverse geographies and customer profiles.
The brokerage also pointed out that Aadhar Housing’s stable margins and improving leverage are set to accelerate return on equity (RoE) back to the high teens. Additionally, low credit costs are expected to support the company’s financial health as it continues to expand its footprint in the affordable housing sector.
Given Aadhar Housing’s strong track record and well-diversified presence, Kotak Institutional Equities believes the company is well-positioned to maintain its leadership in the affordable housing finance space, making it an attractive investment opportunity at the current valuation.
