Synopsis:- A brokerage assigns a ₹1,500 target, implying 34% upside from ₹1,118.65, backed by a strong growth outlook. Disbursements may reach ~₹70bn with 18–20% AUM growth. Expansion through ~50 branches, rising CSC contribution to ₹11bn, and stable 15–16 bps credit cost support long-term potential.
India’s Housing Finance Company (HFC) sector plays a vital role in fueling homeownership dreams amid rapid urbanisation and rising incomes. As of September 2025, HFCs managed assets under management (AUM) of Rs. 9.8 lakh crore, up 15% YoY, with projections for 15-17% growth in FY2026. This expansion, needing Rs. 1-1.2 lakh crore in fresh funding, supports robust returns of 1.9-2.1% on managed assets despite competitive pressures.
With a market capitalisation of Rs 8,868.96 crore, the share of AAVAS Financiers Ltd closed at Rs 1,118.65 per share, increased around 4 percent as compared to the previous closing price of Rs 1,078.90 apiece.
Brokerage Recommendation
Prabhudas Lilladher has maintained a positive stance, assigning a target price of ₹1,500, implying a 34% upside from ₹1,118.65. This suggests confidence in the company’s growth, visibility and business fundamentals. The recommendation reflects expectations of improving performance, with current valuations seen as attractive for investors seeking medium-term gains.
As per the brokerage, Aavas Financiers Ltd is expected to witness strong traction with disbursements rising to ~₹23bn in Q4FY26 from ₹17.2bn in Q3FY26. The company targets ~₹70bn disbursements in FY27, driving ~18% AUM growth in FY27E and ~20% in FY28E, supported by salesforce and tech improvements.
Growth is likely to be fueled by ~50 branch additions in FY27, contributing ₹1–1.5bn incremental business. The CSC channel is expected to scale from ~₹4bn in FY26 to ~₹11bn in FY27, while RROs may contribute ₹0.5–0.6bn at ~14.5% yields. Core markets like Rajasthan are growing at 20–25%.
Cost of funds is expected to remain stable in Q1FY27 with a possible rating upgrade by July 2026, aiding margins. Management guides for a Cost/Income ratio below 40% in FY27 and ~35% medium term, though estimates build ~43%. Credit cost is expected to stay benign at ~15–16 bps.
Financial Highlights
The company reported steady performance, with revenue rising 13% from ₹597 crore in Q3FY25 to ₹674 crore in Q3FY26. Net profit grew faster at 16%, increasing from ₹146 crore to ₹170 crore, indicating improved margins. This gap between revenue and profit growth suggests better cost control and operational efficiency.
Between Dec 2024 and Dec 2025, operating (financing) profit increased from ₹196 crore to ₹230 crore, reflecting steady business growth. Operating margin (financing margin) improved slightly from 33% to 34%, indicating stable profitability. Despite fluctuations during interim quarters, the overall trend suggests consistent operational efficiency and controlled costs over the one-year period.
Aavas Financiers Ltd is a housing finance company focused on providing affordable home loans, especially in semi-urban and rural India. It primarily serves low- and middle-income customers, aiming to improve housing accessibility. With a strong distribution network and customer-centric approach, it has built a niche presence in the affordable housing finance segment.
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