Looking ahead, management expects loan growth of 18% to 20% in FY27, with the overall loan book likely to cross ₹1 lakh crore. It added that yields have largely bottomed out and should start improving from the first quarter of the new financial year.
Growth is expected to be led by the affordable housing segment, followed by emerging and prime categories. Over the next two to three years, the share of affordable and emerging segments in the loan mix is targeted to rise to 50%, from around 40% currently.
On the asset quality front, credit costs are expected to remain negative, supported by strong recoveries.Within the housing finance space, valuations remain varied. LIC Housing Finance Ltd. is seen as the cheapest among peers, trading at around 0.78x book and 5.6x earnings, with steady return ratios of 16% ROE and 1.8% ROA.
In contrast, affordable housing-focused players command premium valuations. Aavas Financiers Ltd. trades at about 2.35x book and 17.6x earnings, while Aadhar Housing Finance Ltd. is valued at 3.14x book and 20.8x earnings.
Aptus Value Housing Finance India Ltd. stands out on profitability, delivering around 18.6% ROE and over 7.4% ROA, and trades at 2.72x book and 14.4x earnings.
The broader sector continues to offer a long growth runway, with India’s mortgage-to-GDP ratio still low at 16.6%.
Affordable housing remains a key driver, with assets under management in the segment projected to reach ₹14.1 lakh crore by FY27.
