Bernstein bullish on Aptus, HomeFirst and Aadhar

ET BureauLast Updated: Jul 11, 2025, 05:48:00 AM IST

Synopsis

Bernstein started covering affordable housing finance companies. HomeFirst Finance, Aptus, and Aadhar received 'Outperform' ratings. Aavas and PNB Housing Finance got 'Market-Perform' ratings. Mortgages are expected to fuel growth due to low penetration. Affordable mortgages should remain a significant portion of the market. Lenders focusing on low-income borrowers are likely to benefit.

Mumbai: Bernstein initiated coverage on housing finance companies in the affordable segment and assigned an 'Outperform' ratings to HomeFirst Finance, Aptus, and Aadhar; and 'Market-Perform' ratings to Aavas and PNB Housing Finance.

The brokerage said around 60% of the labour force has access to credit and mortgages are likely to drive the next leg of growth given the low mortgage penetration.

"We expect affordable mortgages (ticket size <$30k now) to continue accounting for 1/3rd of the total mortgage market. Specialised lenders focused on low-income, informally employed borrowers-with operationally intensive models -stand to gain share in this segment," said analysts at Bernstein.

Affordable housing space remains attractive with over 3% return on assets and growth and the ability to replicate operating model consistently across multiple states will be a key for lenders.

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