At a Glance
Aadhar Housing Finance Ltd is India’s largest HFC for the low-income segment. It lends to Tier 2-4 India with average loans under ₹15 lakh, 39% profit margin, and 17% ROE. Stock has done little since IPO but earnings are climbing steadily. Is this boringly beautiful… or beautifully boring?
1. 📢 Introduction – Why Should You Care?
- 🧱 Largest low-income housing finance NBFC (avg loan size ₹10 lakh)
- 💸 ₹912 Cr net profit in FY25, up 67% from FY22
- 🔢 EPS doubled from ₹11 in FY22 to ₹21 in FY25
- 💰 PE ratio ~21x, ROE 17%, OPM 39%
- 🚩 Promoter pledge: 67% of their stake 🤯
After a forgettable IPO, this one’s quietly turning into a compounder… with one massive red flag stapled to it.
2. 🧱 WTF Do They Even Do?
- Provides home loans to low-income individuals in Bharat – 80% self-employed borrowers
- Focused on Tier 3/4 towns, small builders, informal income earners
- Average loan size: ₹10 lakh
- LTV (Loan-to-Value): ~58% 👌
- 75%+ secured by mortgage of property
- Also offers loan against property (LAP) & balance transfers
In short: Think of it as the LIC Housing for people who don’t have salary slips, living in towns where Swiggy still doesn’t deliver.
3. 📊 Financials – Is the Growth Real?
| Metric | FY22 | FY23 | FY24 | FY25 |
|---|---|---|---|---|
| Revenue (₹ Cr) | 1,728 | 2,043 | 2,587 | 3,108 |
| Net Profit (₹ Cr) | 445 | 545 | 750 | 912 |
| EPS (₹) | 11.3 | 13.8 | 19.0 | 21.1 |
| ROE | 15% | 16% | 18% | 17% |
| Net NPA | 1.1% | 0.9% | 0.7% | 0.7% |
🔥 3-year CAGR
- Revenue: 21%
- Net Profit: 27%
- EPS: 22%
Yeh toh proper “boring se sexy” graph hai.
4. 💸 Valuation – Is It Cheap, Meh, or Crack?
| Metric | Value |
|---|---|
| Price | ₹455 |
| Book Value | ₹148 |
| PE | 21.6x |
| P/B | 3.08x |
| Market Cap | ₹19,700 Cr |
| FV Range (EduEstimates) | ₹390 – ₹470 |
It’s fairly valued — below HomeFirst, AAVAS, or Aptus, and rightly so. Because…
🚩 Promoters have pledged 67.4% of their shares.
That’s a MAJOR risk. Stock deserves a slight discount until that’s sorted.
5. 🧂 What’s Cooking – Recent Drama and News
- 🧾 May 2025 Concall: Management confident of 20% AUM growth
- 🧍 IPO in May 2024 at ₹315 – stock up ~45% since listing
- 💸 Net NPA remains under 1% = surprisingly safe for low-income HFC
- 🧱 Branch expansion continues; focus on South & East India
- 🧑🏽💻 Targeting deeper tech-led onboarding to reduce costs
- 🔒 Promoters are Blackstone-backed, but pledged 67% = contradiction much?
No scandals. No fireworks. Just slow compounding. And a ticking pledge bomb.
6. 🏦 Balance Sheet – How Leveraged Are We?
| Year | Borrowings (₹ Cr) | Net Worth (₹ Cr) | Debt/Equity |
|---|---|---|---|
| FY22 | 10,675 | 3,147 | 3.4x |
| FY23 | 12,153 | 3,698 | 3.3x |
| FY24 | 13,960 | 4,450 | 3.1x |
| FY25 | 16,322 | 6,372 | 2.6x |
🔋Debt-heavy but improving.
📉 Leverage is coming down slowly thanks to IPO funds and retained earnings.
7. 🪙 Cash Flow – Sab Number Game Hai
| Year | CFO (₹ Cr) | CFI | CFF | Net Flow |
|---|---|---|---|---|
| FY24 | -2,429 | +602 | +1,778 | -₹49 Cr |
| FY25 | -3,027 | +160 | +3,389 | +₹522 Cr |
HFC cash flow is tricky — negative CFO due to high disbursement. No red flag here, but not juicy either.
8. 📐 Ratios – Sexy or Stressy?
| Metric | Value |
|---|---|
| ROE | 17% |
| ROA | 4.3% |
| NIM | 5.7% |
| GNPA | 1.05% |
| NNPA | 0.7% |
| Tier 1 Capital | ~40% (Healthy) |
| Interest Coverage | < 2x ⚠️ |
| Promoter Pledge | 67.4% 🚨 |
It’s a strong business operationally. But those low coverage ratios and promoter pledges can make investors flinch.
9. 📊 P&L Breakdown – Show Me the Money
- 🏦 Total Income (FY25): ₹3,108 Cr
- 💰 Net Interest Income: ₹1,197 Cr
- 💸 PAT: ₹912 Cr
- 🧾 Opex: ₹737 Cr
- 📈 OPM: 39%
- 🪙 EPS: ₹21.1
- 📉 No dividend, again.
Margins are exceptional. No freebies (dividends) yet, but hey — reinvesting profits is fine if they keep growing at 20%+.
10. 🏁 Peer Comparison – Who Else is in the Race?
| Company | PE | ROE | GNPA | Net Profit (FY25) |
|---|---|---|---|---|
| LIC Housing | 6x | 16% | 4%+ | ₹5,442 Cr |
| PNB Housing | 14x | 12% | ~2% | ₹1,949 Cr |
| Aptus | 22x | 18.6% | <1% | ₹751 Cr |
| HomeFirst | 37x | 16.5% | 1% | ₹382 Cr |
| Aadhar | 21.6x | 17% | 1.05% | ₹912 Cr |
🧠 Insight:
- Better than Aptus & HomeFirst on scale
- Cheaper than HomeFirst
- But Blackstone pledge creates an “overhang” vs others
11. 🕵️ Miscellaneous – Ownership & Oddities
- 💼 Promoters: 75.6% (but pledged 67.4% of that 😵)
- 💸 IPO in 2024 was mostly OFS, not fresh capital
- 🧠 2 lakh+ public shareholders already onboard
- 🧾 Auditors: Deloitte Haskins – ✅
- 📈 Strong DII and FII participation growing steadily
12. 🧑⚖️ EduInvesting Verdict™
“It’s like your fixed deposit: stable, boring, and slightly underappreciated – until you realise it’s compounding better than your ex’s new boyfriend’s crypto account.”
✅ Best-in-class NPA
✅ Solid 20%+ profit growth
✅ Clean operations, improving leverage
❌ Pledged promoter stake = elephant in the room
❌ No dividend = “value” investors won’t love it
Fair Value Range: ₹390 – ₹470
Looks fairly priced, but a de-pledge or rating upgrade could trigger rerating. For now, it’s a compounding machine under the radar.
✍️ Written by Prashant | 📅 July 8, 2025
Tags: Aadhar Housing Finance, HFC stocks, Low Income Housing, Blackstone India, Promoter Pledge, Financial Services, Tier 3 Lending, EduInvesting, IPO Watch, NBFC Housing
