According to reports from The Hindu BusinessLine, Bernstein has issued Outperform ratings on two affordable housing finance companies (AHFCs) - Aptus Value Housing Finance and Aadhar Housing Finance. The brokerage maintains these ratings despite broader market sell-off affecting Indian banks and NBFCs, citing attractive valuations and improving fundamentals in the AHFC segment.
As reported by The Hindu BusinessLine, Aptus Value Housing Finance is recommended with a target price of ₹350 against its current market price of ₹217.80. The company leads the sector on earnings per share (EPS) growth at 25% year-on-year (Q3FY26 TTM), outpacing larger NBFC peers including BAF (12%), Aavas (11%), and L&T Finance (9%). The company maintains healthy financial metrics with Return on Assets (RoA) at 7.3-7.4% and Net Interest Margin (NIM) at 10.9%, while maintaining a cost-to-income ratio of 20-21% - among the best in the sector.
According to The Hindu BusinessLine, Aadhar Housing Finance is recommended with a target price of ₹600 against its current market price of ₹471.65. The company achieved 21% year-on-year AUM growth in Q3FY26, broadly in line with its historical average. Management guides for 18-20% AUM growth in FY27, supported by improving branch vintage and planned addition of 40-50 new branches. The company's diversified geographical presence with no single state exceeding 15% of AUM provides meaningful insulation from microfinance stress and tariff-related disruptions.
As reported by The Hindu BusinessLine, Bernstein believes AHFCs are approaching an inflection point after experiencing sharp moderation in disbursement growth over the past 12 months. The brokerage notes that Q3FY26 results show sequential improvement in disbursement growth and stabilizing early-stage delinquency indicators for most lenders. The prevailing macro concerns have triggered broad-based sell-off across Indian banks and NBFCs, but Bernstein sees this as a favorable entry point for the affordable housing finance segment.
