Up to 75% upside targets! What Bernstein says on 5 affordable HFC shares
Bernstein rated Home First Finance, Aadhar Housing and Aptus Value as 'Outperform', while it called Aavas Financiers Ltd and PNB Housing Finance Ltd as 'Market-Perform'.
- Apr 9, 2026,
- Updated Apr 9, 2026 12:55 PM IST
Bernstein in its latest note on financial sector reiterated its investment case for affordable housing finance companies (AHFCs), led by a potential inflection in growth and asset quality, along with their favourable positioning in the current macro environment.
The brokerage suggested Home First Finance Company India Ltd, Aadhar Housing Finance Ltd, and Aptus Value Housing Finance India Ltd as 'Outperform', while it rated Aavas Financiers Ltd and PNB Housing Finance Ltd as 'Market-Perform'. It also updated its earnings estimates for FY26E-FY28E and revised target prices, hinting at 8-75 per cent potential upsides on the five stocks, based on April 7 closing prices. HomeFirst (43 per cent potential upside) and Aadhar (31 per cent) remained its top picks.
For Aadhar Housing, it revise its FY27 earnings per share estimate to Rs 30 from Rs 31.60 earlier and arrived at the target price of Rs 600. It suggested a target of Rs 1,440 for Aavas Financiers compared with Rs 1,580 earlier.
For Aptus, the target is set at Rs 350. HomeFirst's target has been revised upward to Rs 1,430 against Rs 1,400. For PNB Housing Finance, the target is lowered to Rs 880 against Rs 1,060.
Bernstein said the prevailing macro concerns have triggered a broad-based sell-off across Indian banks and NBFCs, and affordable housing finance companies (AHFCs) have not been spared.
"However, beyond now-attractive valuations, we see several compelling reasons to turn constructive on the segment, driven by an impending inflection in both growth and asset quality. Further, relative to NBFC peers, stronger liability profiles - supported by longer-tenor borrowings and access to NHB funding - along with the inherently secured nature of assets and the relatively smaller scale of these franchises, make AHFCs an attractive segment to own in the current environment," it said.
This, the foreign brokerage said, reinforced its constructive long-term view on the affordable housing theme, and it views the current correction as a favorable entry point.
"We maintain our Outperform ratings on HomeFirst, Aptus, and Aadhar, and Market-Perform on Aavas and PNB Housing Finance," it said.
Bernstein said AHFCs have seen a sharp moderation in disbursement growth over the past 12 months, broadly in line with prime mortgages. This, along with asset quality concerns—driven by potential spillovers from microfinance as well as idiosyncratic factors (e.g. tariff impact across select industries/ geographies)—has led to a meaningful derating across the space, it said.
"We believe both growth and asset quality are now approaching an inflection point. 3QFY26 results provide early evidence: disbursement growth (YoY) has shown sequential improvement, while early-stage delinquency indicators have begun to stabilize or improve for most lenders," it said.
Bernstein in its latest note on financial sector reiterated its investment case for affordable housing finance companies (AHFCs), led by a potential inflection in growth and asset quality, along with their favourable positioning in the current macro environment.
The brokerage suggested Home First Finance Company India Ltd, Aadhar Housing Finance Ltd, and Aptus Value Housing Finance India Ltd as 'Outperform', while it rated Aavas Financiers Ltd and PNB Housing Finance Ltd as 'Market-Perform'. It also updated its earnings estimates for FY26E-FY28E and revised target prices, hinting at 8-75 per cent potential upsides on the five stocks, based on April 7 closing prices. HomeFirst (43 per cent potential upside) and Aadhar (31 per cent) remained its top picks.
For Aadhar Housing, it revise its FY27 earnings per share estimate to Rs 30 from Rs 31.60 earlier and arrived at the target price of Rs 600. It suggested a target of Rs 1,440 for Aavas Financiers compared with Rs 1,580 earlier.
For Aptus, the target is set at Rs 350. HomeFirst's target has been revised upward to Rs 1,430 against Rs 1,400. For PNB Housing Finance, the target is lowered to Rs 880 against Rs 1,060.
Bernstein said the prevailing macro concerns have triggered a broad-based sell-off across Indian banks and NBFCs, and affordable housing finance companies (AHFCs) have not been spared.
"However, beyond now-attractive valuations, we see several compelling reasons to turn constructive on the segment, driven by an impending inflection in both growth and asset quality. Further, relative to NBFC peers, stronger liability profiles - supported by longer-tenor borrowings and access to NHB funding - along with the inherently secured nature of assets and the relatively smaller scale of these franchises, make AHFCs an attractive segment to own in the current environment," it said.
This, the foreign brokerage said, reinforced its constructive long-term view on the affordable housing theme, and it views the current correction as a favorable entry point.
"We maintain our Outperform ratings on HomeFirst, Aptus, and Aadhar, and Market-Perform on Aavas and PNB Housing Finance," it said.
Bernstein said AHFCs have seen a sharp moderation in disbursement growth over the past 12 months, broadly in line with prime mortgages. This, along with asset quality concerns—driven by potential spillovers from microfinance as well as idiosyncratic factors (e.g. tariff impact across select industries/ geographies)—has led to a meaningful derating across the space, it said.
"We believe both growth and asset quality are now approaching an inflection point. 3QFY26 results provide early evidence: disbursement growth (YoY) has shown sequential improvement, while early-stage delinquency indicators have begun to stabilize or improve for most lenders," it said.