Top Housing Finance Stocks to Watch: Bernstein's Outperform Picks
Bernstein has initiated coverage on four housing finance companies, with three receiving an 'outperform' rating. Here's why these stocks are expected to deliver strong returns in the next 12 months.
Housing FinanceOutperformStock MarketInvestmentFinancial AnalysisReal Estate NewsJul 10, 2025
The three housing finance companies that Bernstein expects to outperform are likely to deliver returns between 17% and 22% over the next 12 months. This positive outlook is based on several key factors, including growth potential, operational efficiency, and market positioning.
For Home First Finance, Bernstein's 'outperform' recommendation comes with a price target of ₹1,650, implying a potential upside of 21% from current levels. The ability to consistently replicate its operating model across multiple states is one of the key drivers of this bullish call. Home First Finance also benefits from its smaller size, which allows for faster growth and superior productivity metrics. Additionally, the company has greater flexibility to sustain profitability compared to its peers.
Aptus Value Housing Finance has a price target of ₹400, indicating a potential upside of 17% from current levels. Bernstein notes that Aptus has reasonable valuations and a higher share of fixed-rate loans and small business lending, which positions the company well in a falling interest rate environment. This combination of factors makes Aptus an attractive investment option.
Aadhar Housing Finance, with a price target of ₹550, is expected to gain another 22.5% from current levels. Bernstein considers Aadhar Housing to be a good proxy in this field, given its status as the largest and most geographically diversified player. The brokerage expects the company to maintain a steady growth trajectory, growing its Assets Under Management (AUM) at a Compounded Annual Growth Rate (CAGR) of 20%.
On the other hand, Aavas Financiers has been given a 'market-perform' rating with a price target of ₹2,070, which does not imply significant upside from current levels. While Bernstein does expect a near-term rebound in Aavas Financiers, inconsistent outcomes from geographic expansion make the brokerage cautious about its long-term outlook.
Shares of Home First Finance are currently trading 5% higher at ₹1,431, while those of Aadhar Housing are trading with gains of 2.3% in early trading at ₹460. Shares of Aavas Financiers have risen 4.3% in the last one month, while those of Aptus and Home First have risen 3.5% and 7.3%, respectively, over the same timeframe. However, shares of Aadhar Housing have been underperforming, declining 0.8% in the last one month.
Overall, Bernstein's positive outlook on these housing finance companies is driven by their strong fundamentals and growth potential. Investors looking to capitalize on the housing finance sector should consider these stocks as part of their investment portfolio.
Frequently Asked Questions
What is Bernstein's recommendation for Home First Finance?
Bernstein has given Home First Finance an 'outperform' rating with a price target of ₹1,650, implying a potential upside of 21% from current levels.
Why does Bernstein expect Aptus Value Housing Finance to outperform?
Bernstein expects Aptus Value Housing Finance to outperform due to its reasonable valuations and a higher share of fixed-rate loans and small business lending, which positions the company well in a falling interest rate environment.
What is the expected growth rate for Aadhar Housing Finance?
Bernstein expects Aadhar Housing Finance to maintain a steady growth trajectory, growing its Assets Under Management (AUM) at a Compounded Annual Growth Rate (CAGR) of 20%.
Why has Aavas Financiers been given a 'market-perform' rating?
Aavas Financiers has been given a 'market-perform' rating due to inconsistent outcomes from geographic expansion, which makes Bernstein cautious about its long-term outlook.
How have the shares of these companies performed recently?
Home First Finance shares are trading 5% higher at ₹1,431, while Aadhar Housing shares are trading with gains of 2.3% in early trading at ₹460. Aavas Financiers shares have risen 4.3% in the last one month, and Aptus and Home First shares have risen 3.5% and 7.3%, respectively, over the same timeframe. However, Aadhar Housing shares have declined 0.8% in the last one month.
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