Stocks to Buy: Three Housing Finance stocks that Bernstein expects to out perform

By Admin

10 Jul, 2025

In its latest research note released on Thursday, July 10, global brokerage firm Bernstein has turned the spotlight on India’s thriving housing finance sector, initiating coverage on four key players: Home First Finance, Aptus Value Housing Finance, Aadhar Housing Finance, and Aavas Financiers. Among these, Bernstein has issued an "outperform" rating for the first three stocks, while assigning a "market-perform" rating to Aavas Financiers.

Home First Finance: Growth, Flexibility, and Strong Fundamentals

Bernstein has set a price target of ₹1,650 for Home First Finance, indicating a potential upside of 21% from current levels. The stock is currently trading around ₹1,431, already showing a 5% increase in early trading.

The brokerage is particularly optimistic about Home First due to:

• Consistent replication of its business model across multiple states
  
  

• Faster growth and superior productivity metrics driven by its smaller size
  
  

• Higher flexibility to maintain profitability, even when compared to larger peers
  
  

These attributes make Home First Finance a compelling pick for long-term investors, especially as the company continues to strengthen its pan-India presence.

Aptus Value Housing Finance: Well-Positioned for Lower Interest Rates

Aptus Value Housing Finance has also received an “outperform” rating, with a target price of ₹400, implying a 17% upside from Wednesday’s closing price.

Bernstein notes the following strengths in Aptus’s business model:

• Reasonable valuations, making it attractive in the current market
  
  

• Higher share of fixed-rate loans, which cushions the impact of falling interest rates
  
  

• Strong presence in small business lending, enhancing its growth prospects in underserved markets
  
  

With shares already gaining 3.5% over the past month, Aptus seems to be on a positive trajectory.

Aadhar Housing Finance: Diversified and Steadily Growing

Aadhar Housing Finance, the third stock to earn an “outperform” tag, is set to benefit from its geographic diversity and strong fundamentals. Bernstein has set a target price of ₹550, indicating a 22.5% potential upside from current levels of ₹460.

What sets Aadhar apart?

• It is one of the largest and most geographically diversified housing finance companies in India
  
  

• Bernstein expects Aadhar to grow its Assets Under Management (AUM) at a CAGR of 20%
  
  

• Despite recent underperformance (a 0.8% decline in the last month), the company’s long-term growth prospects remain intact
  
  

Aavas Financiers: Cautious Optimism

Unlike the other three, Bernstein has adopted a more neutral stance on Aavas Financiers, assigning it a “market-perform” rating. The target price of ₹2,070 suggests little room for upside from current levels.

While the stock has shown a 4.3% gain in the past month, the brokerage is cautious due to inconsistent results from its geographic expansion efforts. Bernstein still expects a near-term rebound, but has held back from issuing a bullish call for the long term.

Final Thoughts

Bernstein’s outlook reinforces investor confidence in India’s housing finance sector, particularly in companies like Home First, Aptus, and Aadhar Housing. Their strong fundamentals, strategic positioning, and focused growth approaches make them attractive picks in a sector that’s expected to benefit from favorable macroeconomic trends and housing demand.

As always, investors should perform due diligence and consider their own financial goals before making investment decisions.