Target: ₹650
CMP: ₹479.40
We hosted MD & CEO, CFO of Aadhar Housing for investor meetings in Mumbai.
Key takeaways: Medium-term AUM trajectory of 20-22 per cent with over ₹50,000 crore milestone within 3 years. Pan-India presence and deeper coverage de-risk it from State-specific growth challenges; Dual market approach to effectively manage market dynamics – Urban/ Emerging ‘A’ markets target volume/AUM growth, while ‘B’ & ‘C’ prioritise value and enhanced risk-adjusted returns; spreads to sustain above 5.6 per cent over the medium term; and credit cost guidance of 25-27 bps; Annual improvement of 40-50 bps in C/I and 6-8bps in cost/assets over the next 3 years.
We rate Aadhar Housing shares as Buy. We expect Aadhar shares to command a premium, given superior and projected sustainable RoA/RoE of over 4.5/16.5 per cent over FY25-27E. Aadhar differentiates itself with: scale with granularity; non-conventional diversified distribution; cost-efficient graded branch structure, phased expansion and tech stack improving productivity & analytics.
Using a two-stage Gordon Growth model, we arrive at a target price of ₹650 for Aadhar assuming CoEs of 12.2 per cent, medium-term RoEs of 16 per cent and high growth phase of 10 years with expected growth of 20 per cent. We assign price-to-book of 3.3x 9MFY27E BV.
Risks: The build-up of stress in LAP over and above expectations; and roll-back from elevated GS3 getting disrupted due to activity slowdown also leading to growth slowdown.
Published on February 20, 2026
