ICICI Securities has issued a buy rating on Aye Finance with a target price of ₹285 in its research report dated September 14, 2026. According to the report, the brokerage values the stock at 2x FY28E P/BV, reflecting confidence in the company's growth trajectory and market positioning. The current target price implies an upside potential of almost 59% from the stock's previous session close of ₹179.65 on the BSE. Aye Finance shares have delivered a solid return of more than 80% in the last six months, according to BSE data, hitting a 52-week high of ₹197.95 on July 21 after touching a 52-week low of ₹88.40 on April 2.
Aye Finance has established a formidable presence in India's mass-affluent lending market through its niche funding offerings in the ₹1.5 lakh to ₹5 lakh ticket size segment. As reported by ICICI Securities, the company operates in a sizeable white space that exists between microfinance/digital loans (₹0.5 million) and micro-LAP, affordable mortgage and vehicle loans. Most of its peers either operate below ₹1.5 lakh (MFIs/digital lenders) or above ₹5 lakh (S-LAP/AHFC), making Aye Finance uniquely positioned to bridge this gap. The company's distinct business model is helping propel it as one of the fastest-growing NBFCs with a FY20-26 AUM CAGR of approximately 26%.
The company has demonstrated exceptional financial recovery with credit cost consistently declining from 5% in FY26 to sub-4% in Q1FY27, according to ICICI Securities. Spread expanded to 11.6% by June 2026, up from 10.9% in June 2025, supported by a reduction of more than 45 basis points in the cost of funds. The overall RoE improved to 16% by Q4FY26, from nearly 9–10% in the past seven quarters, driven by enhanced operating efficiency. Aye Finance has shown improving earnings with 2.7% RoA in FY26 versus 2% in FY23, indicating strengthening operational performance and profitability metrics.
The company is gradually emerging from an asset quality cycle and has demonstrated steady improvement in core earnings in recent quarters. As reported by ICICI Securities, this recovery trajectory supports the positive investment outlook and the brokerage's decision to initiate coverage with a buy rating. The company's focus on bridging the gap between traditional lending segments has positioned it uniquely in the market, with its niche offerings in the ₹1.5 lakh to ₹5 lakh segment providing competitive advantages over peers.
