According to reports from Moneycontrol, Prabhudas Lilladher has issued a buy rating on AAVAS Financiers with a target price of ₹1500 in its research report dated March 27, 2026. The brokerage firm expects the stock to benefit from sustainable growth prospects and margin outlook despite recent market corrections. The recommendation is underpinned by the belief that the company has successfully navigated a period of significant transition and is now positioned for steady growth.
As reported by Moneycontrol, the stock has corrected 11.5% over the past month, providing what the brokerage views as an attractive entry point for investors. The stock's recent correction has brought its valuation to an attractive level, currently trading at 2.5 times its one-year forward price-to-book (P/B) value, which represents a significant 44% discount to its long-term average and is the lowest among its peers. The recommendation comes at a time when the company's operational challenges appear to be subsiding, creating potential for improved performance in the coming fiscal years.
According to the research report, AAVAS Financiers expects AUM growth of 18%/20% in FY27/FY28E, with Prabhudas Lilladher building more conservative projections of 17%/18% as execution in non-RJ markets remains key to achieving these targets. The growth is anticipated to be driven by branch expansion, CSC scale-up, and the RRO model implementation. As of the third quarter of FY26, the company's AUM stood at ₹222.0 billion, marking a 15% year-on-year increase, indicating that the growth momentum is already building.
As reported by Moneycontrol, the company expects operating expenses to remain elevated in FY27 due to new branch additions, while credit costs are expected to remain benign at 15-16 basis points. A potential credit rating upgrade by July 2026 is likely to support net interest margins going forward. In Q3 FY26, the company's reported spread improved to 5.34%, and it has guided for maintaining a spread of around 5.25% for FY26. The brokerage expects productivity benefits to lead to a gradual improvement in the opex ratio in the medium term.
According to the brokerage report, Prabhudas Lilladher has rolled forward to FY28E with a target price of ₹1500, representing a 1.8x FY28E P/ABV multiple. The company has maintained strong asset quality with Gross Non-Performing Assets (GNPA) at 1.19% and Net Non-Performing Assets (NNPA) at 0.79% in Q3 FY26, demonstrating robust underwriting and collection processes. The recommendation maintains a buy rating based on the company's sustainable growth prospects and margin outlook despite recent market volatility.
