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Informist, Thursday, Nov. 6, 2025

By Reshma Ravi

MUMBAI - Aadhar Housing Finance Ltd. is expected to report a substantial on-year rise in its net profit for the September quarter because of growth in assets under management and higher net interest income. Analysts said improved funding costs and controlled operating expenses likely helped increase the profit. Lower credit costs may have also supported bottom line growth during the reporting quarter.

The company is expected to report a net profit of INR 2.63 billion for the September quarter, up 11% on quarter and nearly 16% on year, according to the average of estimates from five brokerages. The highest estimate for net profit is INR 2.71 billion from Elara Securities (India) Pvt. Ltd., while the lowest estimate is INR 2.57 billion from Kotak Securities Ltd.

The housing finance company is expected to report a net interest income of INR 4.74 billion for the September quarter, up 11% on quarter and 22% on year, according to the average of estimates from five brokerages. The highest estimate for net interest income is INR 5.58 billion from YES Securities (India) Ltd., while the lowest estimate is INR 4.41 billion from JM Financial Institutions Securities Pvt. Ltd.

Aadhar Housing Finance is expected to report 21% on-year growth in assets under management for the September quarter, Kotak said. The brokerage attributed this to 9% growth in disbursements, despite the company operating on a high base, as disbursements had already risen 20% in the first half of the year.

The company's spread, which is the difference between the rate of interest charged on loans and the cost of funds, is likely to increase to 6.5%, up 15 basis points on quarter, Kotak said. This improvement reflects the benefit of lower incremental funding costs, as the company has been able to raise new borrowings at cheaper interest rates over the past nine months. 

Moderate growth in operating expenses is also expected to be a positive for the company. "Operating expense growth will be moderate at 11% leading to cost-to-AAUM ratio to 2.8% (2.9-3.2% in the previous four quarters)," Kotak said. 

The company's credit cost is expected to decline 0.3% on quarter, Kotak said. On the other hand, Elara Capital said, "Credit costs are expected to increase by 25 bps QoQ; however, management expects them to normalize over the course of the year". The credit costs are expected to decline sequentially, ICICI Securities and JM Financials said.  

The company's net profit is expected to increase 14.4% on quarter and 19.3% on year, driven by healthy yields despite higher provisions, Elara said. Provisions are likely to see a significant increase, rising 66.9% on quarter and 234.8% on year, the brokerage firm said.

In the June quarter, the company had reported assets under management of INR 265.24 billion, up 22% on year. Disbursements stood at INR 19.79 billion, growth of 32% on year, supported by sustained demand in the affordable housing segment.  

Aadhar Housing reported a consolidated net profit of INR 2.37 billion for the June quarter, up 18.6% on year. Revenue from operations for the quarter rose 18.9% to INR 8.48 billion. Aadhar Housing Finance will announce its September quarter earnings on Friday. 

All five brokerage reports on the company available with Informist have a 'buy' recommendation for the stock with an average target price of INR 570. 

At 1513 IST, shares of Aadhar Housing Finance were at INR 498.50 on the National Stock Exchange, down 2% from the previous close. Since reporting its June quarter earnings on Jul. 25, the company's shares have risen 0.4%.

Following are the Jul-Sept earnings estimates for Aadhar Housing Finance from five brokerages in descending order of the estimate of net profit in INR million:

End

US$1 = INR 88.62

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

Edited by Avishek Dutta

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