IDBI Capital Initiates Coverage on Aadhaar Housing Finance, Sees 20% Upside Potential
IDBI Capital Initiates Coverage on Aadhar Housing Finance with a 'Buy' Rating
IDBI Capital, a prominent brokerage firm, has commenced coverage on Aadhar Housing Finance, a leading player in the affordable housing finance industry. The firm has assigned a 'buy' rating to Aadhar Housing Finance stock, with a target price of ₹537 apiece. This valuation suggests an upside potential of up to 20% from the company's last closing price of ₹449.80.
According to IDBI Capital's analysis, Aadhar Housing Finance is poised for sustainable earnings growth due to its scalable distribution franchise, strong asset quality, and favorable industry tailwinds. The firm expects the company's asset under management (AUM) to reach ₹50,000 crore by FY29, while return on assets (RoA) is anticipated to sustain at 4.5–4.6% and return on equity (RoE) at 16–17% over the medium term.
| Metric | FY28E (IDBI Capital) | FY29E (IDBI Capital) |
|---|---|---|
| Asset Under Management (AUM) | - | ₹50,000 crore |
| Return on Assets (RoA) | 4.5% | 4.6% |
| Return on Equity (RoE) | 16% | 17% |
IDBI Capital also forecasts that Gross Non-Performing Assets (GNPA) will remain in the 1.1–1.5% range, with credit cost at 30–40 bps over the next three years. The firm's growth expectations are anchored in structural demand within the low-income housing segment, calibrated expansion into emerging and relatively low-competition geographies, disciplined portfolio construction, and a scalable branch-led operating framework.
Aadhar Housing Finance reported a 17.49% increase in its consolidated net profit for the quarter ended December 31, 2025. Profit after tax (PAT) rose to ₹281.21 crore in Q3 FY26, compared with ₹239.34 crore in the same period last year. The company's total consolidated income for the quarter climbed 18.32% to ₹943.77 crore, up from ₹797.64 crore a year ago.
Key highlights from Aadhar Housing Finance's Q3 results 2026 include:
- Consolidated net profit increased by 17.49% to ₹281.21 crore
- Consolidated income rose by 18.32% to ₹943.77 crore
- Assets under management (AUM) stood at ₹28,789.96 crore as of December 31, 2025
- Disbursements reached ₹6,469.08 crore
- Average cost of borrowing was 8.01%, and the loan spread was 5.84%
- Cost-to-income ratio came in at 35.40%
- Gross NPAs as a proportion of AUM were 1.38%, while net NPAs stood at 1.01%
- Net worth was reported at ₹7,185.24 crore
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Aadhar Housing Finance share price has fallen marginally on Wednesday, trading 0.47% lower at ₹446.75 apiece. The stock has largely remained under pressure in the near term, shedding 5.12% in a week and 2.57% in a month. However, on a year-to-date (YTD) basis, the stock has fallen 7.11%, but has gained 5% in a year. Since its listing on May 15, 2024, Aadhar Housing Finance shares have surged nearly 29% from their listing price of ₹315 per share.
Investor Takeaway
Investors should consider buying Aadhaar Housing Finance shares due to its strong positioning in the affordable housing finance industry.
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