Aadhar Housing Finance Ltd: A Bright Future in Affordable Housing

Aadhar Housing Finance Ltd (AHFL) is among India’s largest low-income housing finance companies, dedicated to providing home financing solutions to economically weaker sections of society. The company has been a focus of attention due to its strong asset quality and growth potential.

The company expects the second half of FY26 to outperform the first half, with a target of 20-22% growth in Assets Under Management (AUM). This ambitious growth plan is supported by the company's commitment to passing on interest rate cuts to customers by the end of Q3, ensuring that it remains competitive in the market.

Financially, AHFL is well-capitalized, with resources sufficient to support operations for the next 2.5 to 3 years. This strong financial foundation allows the company to pursue strategic initiatives with flexibility and stability. Government initiatives in the affordable housing sector are also expected to create demand for an additional 3 crore housing units, presenting significant growth opportunities.

Asset quality remains a key focus for AHFL, with the company guiding gross Non-Performing Assets (NPA) for FY26 in the range of 1.15-1.1%. This reflects a disciplined approach to risk management and positions the company for sustainable long-term growth.

AHFL has a strong track record of financial efficiency, with an ROCE of 11.4% and an ROE of 16.9%. Over the last five years, the company has achieved a 36.6% CAGR in net profit, demonstrating its ability to deliver consistent and impressive profitability.

As of Q2FY26, AHFL reported robust financial growth. Sales increased by 17% year-on-year to Rs. 897 crore from Rs. 764 crore in Q2FY25. EBITDA grew by 18% to Rs. 689 crore, up from Rs. 584 crore a year ago. Net profit rose by 17% to Rs. 266 crore, compared to Rs. 228 crore in Q2FY25, translating to an EPS of Rs. 6.15, up 16% from Rs. 5.29 last year.

AHFL’s focus on the underserved and low-to-middle-income segments, particularly the Economically Weaker Section (EWS) and Low Income Group (LIG) across semi-urban and rural India, sets it apart in the housing finance sector. The company’s strong financial performance and strategic initiatives make it a compelling investment opportunity for those interested in the affordable housing market.

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