Aadhar Housing Finance Gets 'Buy' From Investec As It Sees 30% Upside

Investec started coverage on Aadhar Housing Finance Ltd. with target price Rs 600, which implies over 28% upside from Monday's closing price. The brokerage gave a 'Buy' rating to the stock as it is confident about growth in the near term because of its diversified sources, and its presence across many states.

The Blackstone-backed Aadhar Housing Finance is the largest retail-focused HFC company in India, according to Investec. The company is specialised in the low–income housing segment.

Aadhar Housing Finance has presence across 21 states and union territories across the country, Investec said in the note. It manages Rs 21,700 crore assets as of June 2024.

Investec forecasted asset under management and net profit growth of 21% and 20%, respectively, over financial year 2023-24–2026-27 at an average of Return of Equity of 17%, it said in a note.

Growth of Aadhar Housing Finance is inevitable despite its size because of its position as only affordable HFC, hybrid underwriting model and low cost of funds, Investec said in a note.

Aadhar Housing Finance has the highest credit rating—CRISIL AA—, which makes it easier for the company to source fund at lower cost, Invest said.

Investec found Aadhar Housing Finance's operating model unique because most of its functions are done in house.

Aadhar Housing Finance has risk-containment unit consisting of 35 personnel in house which test of risk of every file. The 45-member legal team of the company oversees external legal challenges, it said in a note.