AADHARHFC - Fundamental Analysis: Financial Health & Valuation
Last Updated Time : 05 Nov 25, 7:43 am
Back to Fundamental ListFundamental Rating: 3.9
📊 Financial Overview: Aadhar Housing Finance Ltd. presents a strong financial profile for a housing finance company. It has a ROE of 16.9% and ROCE of 11.4%, indicating efficient capital deployment. The debt-to-equity ratio of 2.56 is typical for NBFCs and manageable given its profitability. EPS stands at ₹22.0, and the company posted a quarterly PAT of ₹237 Cr, slightly down from ₹245 Cr, but still showing a positive profit variance of 18.6% YoY.
💰 Valuation Metrics: The stock trades at a P/E of 23.3, slightly above the industry average of 19.3, suggesting fair valuation. The P/B ratio is ~3.45 (₹510 / ₹148), and the PEG ratio of 0.86 indicates that the stock is reasonably priced relative to its growth. Dividend yield is 0%, which is common for growth-focused financial institutions.
🏢 Business Model & Competitive Edge: Aadhar Housing Finance focuses on affordable housing loans, catering to underserved segments across urban and semi-urban India. Its wide reach and tech-enabled underwriting provide scale and efficiency. Backed by Blackstone, the company benefits from strong capital support and strategic guidance. Its consistent revenue growth and improving asset quality enhance its competitive positioning.
📉 Entry Zone: A good entry zone lies between ₹460–₹490, near the 200 DMA and below the recent high of ₹548, offering better valuation comfort.
📈 Long-Term Holding Guidance: Aadhar Housing Finance is suitable for long-term investors seeking exposure to India’s affordable housing and financial inclusion themes. Accumulate on dips and monitor asset quality, cost of funds, and regulatory developments.
✅ Positive
- Strong ROE (16.9%) and consistent quarterly PAT
- EPS of ₹22.0 supports earnings strength
- PEG ratio of 0.86 indicates reasonable valuation
- FII holdings increased by 0.53%, showing foreign investor confidence
⚠️ Limitation
- High debt-to-equity ratio (2.56), typical for NBFCs but worth monitoring
- P/E ratio (23.3) slightly above industry average (19.3)
- Dividend yield is 0%, limiting income appeal
- Volume below 1-week average, indicating reduced momentum
📉 Company Negative News
- Quarterly PAT declined from ₹245 Cr to ₹237 Cr
- MACD negative (-0.59), suggesting short-term technical weakness
📈 Company Positive News
- Consistent revenue growth over the last four quarters
- Trading above 200 DMA, indicating bullish long-term trend
🏦 Industry
- Housing finance sector benefits from government push for affordable housing
- Industry PE of 19.3 reflects moderate valuation
- NBFCs with rural and semi-urban focus gaining traction
🧾 Conclusion
Aadhar Housing Finance is a well-positioned player in the affordable housing segment with solid fundamentals and growth potential. While valuation is fair, long-term prospects remain attractive. Consider accumulating below ₹490 for better margin of safety. Monitor asset quality and regulatory trends.
Sources
bing.com
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