Systematix Research has initiated coverage on five affordable housing finance companies—Home First Finance, Aptus Value Housing Finance, Aavas Financiers, Aadhar Housing Finance and India Shelter Finance—with ‘Buy’ ratings. Based on their August 28 closing prices, the brokerage sees potential upside ranging from 28% to 48%, with Aptus offering the highest return opportunity.

Systematix expects affordable housing financiers to benefit from India’s low mortgage penetration, rising incomes, urbanisation and growing demand from self-employed and semi-formal borrowers. Mortgage credit accounted for just 12% of GDP in FY25, while loans below Rs 35 lakh still represented about 82% of housing-loan volumes.

The brokerage expects most companies under its coverage to deliver loan growth in the low-to-mid-20% range and profit growth of 18-23% through FY29. Home First FinanceSystematix has assigned a Buy rating on Home First Finance with a target price of Rs 1,570, implying a 31% upside from the current market price of Rs 1,200.

The brokerage sees operating productivity as Home First’s key advantage. Its centralised underwriting, common sales and collection systems, technology-led processes and relatively light branch network allow it to grow without a proportionate increase in costs.

Systematix expects assets under management to grow at a 24% CAGR between FY26 and FY29, while earnings per share could increase at a 21% CAGR. 3%, respectively.

Increasing competition from banks and the transfer of loans to rival lenders remain key factors to monitor. However, Systematix believes Home First’s customer-acquisition capabilities and assessed-income underwriting expertise should support healthy growth.

Aptus Value HousingSystematix has a target price of Rs 380 for Aptus, implying a 48% upside from the current market price of Rs 256. Aptus has the strongest return profile in the coverage universe, supported by its exposure to higher-yielding housing, loan-against-property and small-business loans.

5% for housing loans. Systematix forecasts AUM and EPS CAGRs of 22% and 18%, respectively, through FY29.

Growth is expected to rec over as Aptus expands into western India and deepens its presence in southern markets. Geographic concentration in the South and rising competition remain key risks.

Aavas FinanciersSystematix has a target price of Rs 1,700 for Aavas Financiers, implying a 32% upside from the current market price of Rs 1,289. The brokerage views Aavas as a growth-recovery opportunity rather than a turnaround.