AADHARHFC - Aadhar Hsg. Fin.

📊 NSE: AADHARHFC 🏢 Finance - Housing 📅 Last Updated: 12/13/2025 17:42

💰 Financial Performance

Revenue Growth by Segment

Total income grew by 20% YoY to INR 3,109 Cr in FY25 from INR 2,587 Cr in FY24. The growth is driven by a 21% YoY increase in Assets Under Management (AUM), which reached INR 27,553.7 Cr in H1 FY26. The retail-focused housing segment remains the primary driver, with a 5-year AUM CAGR of 17% (FY20-FY25).

Geographic Revenue Split

The company maintains a diversified presence across 21 states and union territories. Risk is mitigated by low concentration, as no single state contributes more than 14% of the total AUM as of March 31, 2025.

Profitability Margins

Profit After Tax (PAT) increased by 22% YoY to INR 912 Cr in FY25. Net Interest Margins (NIM) improved from 7.22% in FY24 to 7.31% in FY25. Return on Assets (ROA) stood at 4.3% in FY25, up from 4.2% in FY24, while Return on Equity (ROE) was 16.9% following the IPO equity infusion.

EBITDA Margin

Pre-provisioning operating profit (PPOP) increased by 23% YoY to INR 1,231 Cr in FY25 compared to INR 1,000 Cr in FY24. This was supported by a stable cost-to-income ratio of 36.4% and an operating expense to average total assets ratio of 3.33%.

Capital Expenditure

The company is aggressively expanding its physical footprint, having set up approximately 20 new branches in Q2 FY26, bringing the total to 623 branches/offices. While specific INR Cr capex for construction is not disclosed, OPEX grew 16% YoY to INR 201 Cr in Q2 FY26 to support this expansion.

Credit Rating & Borrowing

The company maintains a strengthened capital base with a CRAR of 44.61% as of March 31, 2025. Borrowings stood at INR 17,600 Cr in H1 FY26, with a mix comprising 53% bank loans, 23% NHB refinancing, 21% NCDs, and 3% ECB. Spreads remained stable at 5.9%.

⚙️ Operational Drivers

Raw Materials

The primary 'raw material' is capital/debt funding. The borrowing mix consists of Bank Loans (53%), NHB Refinance (23%), Non-Convertible Debentures (21%), and External Commercial Borrowings (3%).

Import Sources

Funding is sourced domestically from Indian banks, the National Housing Bank (NHB), and mutual funds/insurance companies, with 3% sourced internationally via External Commercial Borrowings (ECB).

Key Suppliers

Key financial 'suppliers' include the National Housing Bank (NHB) for refinancing and various commercial banks and institutional investors for NCDs and term loans.

Capacity Expansion

Current distribution capacity stands at 623 branches and offices as of H1 FY26. The company added 20 branches in the most recent quarter and plans to continue deeper penetration through its 'Deeper Impact' and 'Aadhar Gram Unnati' initiatives.

Raw Material Costs

Cost of funds is managed through a diverse borrowing profile. Total borrowings grew 21% YoY to INR 17,600 Cr. The company utilizes Direct Assignment (DA) and Co-Lending to optimize borrowing costs and enhance liquidity.

Manufacturing Efficiency

Operational efficiency is measured by the cost-to-income ratio, which was 36.4% in FY25. The company uses a centralized processing unit (CPU) and automated analytics to improve underwriting speed and accuracy.

Logistics & Distribution

Distribution is handled through a network of Direct Selling Teams (DSTs), Direct Selling Agents (DSAs), and 'Aadhar Mitras' to reach low-income customers in semi-urban areas.

📈 Strategic Growth

Expected Growth Rate

20-22%

Growth Strategy

Growth will be achieved through a 40-60 split between H1 and H2 disbursements, leveraging tailwinds like PMAY subsidies, good harvests, and festive demand. The company is expanding into the outskirts of urban cities and semi-urban areas via its 'Deeper Impact' strategy and increasing its branch count (623 currently).

Products & Services

Small-ticket mortgage loans, home loans for economically weaker sections (EWS), loans against property (LAP), property renovation loans, and financing for commercial property purchase.

Brand Portfolio

Aadhar Housing Finance Limited (AHFL), Aadhar Gram Unnati, Aadhar Mitras.

New Products/Services

Expansion of the Loan Against Property (LAP) portfolio and increased focus on the 'Aadhar Gram Unnati' initiative for rural/semi-urban penetration.

Market Expansion

Targeting deeper reach in 21 existing states, specifically focusing on the outskirts of urban cities and semi-urban regions to capture first-time home buyers.

Market Share & Ranking

Aadhar is a leading player in the affordable housing finance segment with an AUM of INR 25,531 Cr as of March 2025.

Strategic Alliances

Direct Assignment (DA) and Co-Lending agreements with various banks and financial institutions to optimize capital and liquidity.

🌍 External Factors

Industry Trends

The affordable housing sector is growing due to structural tailwinds like urbanization and government support (PMAY). The industry is shifting toward digital-first underwriting and data-backed risk analytics to manage low-income credit profiles.

Competitive Landscape

Competes with other HFCs and small finance banks in the affordable housing space, maintaining an edge through a 100% secured retail portfolio and a low average ticket size of INR 10.3 Lakhs.

Competitive Moat

The moat is built on a deep distribution network (623 branches) and specialized underwriting for the 'informal' income segment. This is sustainable due to the high entry barriers of building a physical semi-urban network and the proprietary data gathered over 14+ years of operations.

Macro Economic Sensitivity

Highly sensitive to rural economic health (harvests/rains) and government schemes; PMAY interest subsidies are a critical driver for demand in the low-income segment.

Consumer Behavior

Shift toward first-time home ownership among low-to-middle-income individuals who previously had limited access to formal credit.

Geopolitical Risks

Limited direct impact as operations are 100% domestic within India, though global interest rate trends may affect ECB costs.

⚖️ Regulatory & Governance

Industry Regulations

Regulated by the National Housing Bank (NHB) and RBI; must comply with Capital Adequacy Ratio (CAR) norms (currently 44.61%) and Income Recognition and Prudential Norms (IRAC).

Environmental Compliance

The company follows a Board-approved ESG framework and CSR policy to support national development goals and inclusive growth.

Legal Contingencies

The company carries an impairment allowance of INR 243.03 Cr as of March 31, 2025, to cover potential credit losses. It also maintains a management overlay provision of INR 58.51 Cr for unforeseen risks.

⚠️ Risk Analysis

Key Uncertainties

Asset quality remains susceptible to stress (GNPA at 1.4%) due to the vulnerability of low-income borrowers to income disruptions during economic downturns.