JM Financial initiates coverage on Aadhar Housing, sees upside potential of 30%
Aadhar Housing Finance is large, affordable-focused and yet undervalued, domestic brokerage firm JM Financial initiated coverage on the stock with a ‘buy’ rating and a target price of Rs 600.
The target price given by the domestic brokerage firm signals an upside potential of 30% from Friday’s closing price of the stock.
Aadhar has a diversified presence across 21 states, where it aims to go deeper into geographies going forward, which should keep growth healthy and well-balanced. Its graded branch expansion strategy allows it to set footprints in Tier-IV/V areas at cheaper costs while use of Aadhar Mitra (lead generation channel) and smart use of tech to handle day-to-today operations significantly contribute to operational efficiencies.
In addition to a diversified presence across the country, Aadhar has multiple sources of origination channels, viz., DSA (35%), DST (43%) and Aadhar Mitra (22%).
“We believe that i) deeper geographical penetration, ii) government push on housing (CLSS subsidy as per PMAY) and iii) multiple sources of origination, will aid the company to grow its AUM at a steady 20%+ CAGR over FY24-26E,” said JM Financial in its report.
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