Kotak picks four housing finance stocks with up to 48% upside
Kotak analysts identify Aadhar, Aptus, Home First, and India Shelter as top housing finance picks expected to see significant growth by FY27.
Growth projections for affordable housing
Kotak has identified four specific housing finance companies poised for significant stock appreciation as the affordable housing sector prepares for a recovery. The financial institution expects these firms to regain substantial growth momentum by the 2027 financial year.
The analysis focuses on companies operating within the niche of affordable housing finance, a segment that has faced various macroeconomic pressures. Analysts suggest that the underlying fundamentals of these specific entities position them to outperform as market conditions stabilise.
Top stock picks and potential returns
The report highlights four primary stocks that meet the criteria for high upside potential. While individual performance may vary based on market volatility, the projected gains are considerable:
- Aadhar
- Aptus
- Home First
- India Shelter
According to the projections, these stocks could see price increases ranging from 12% to 48%. This upside is predicated on the anticipated resurgence of the affordable housing finance market through the next fiscal cycle.
Sector outlook for FY27
The shift in momentum is expected to be driven by evolving credit demand and the expanding reach of non-banking financial companies (NBFCs) in underserved segments. Kotak's outlook suggests that the structural demand for low-to-mid income housing remains a primary driver for long-term sectoral growth.
Financial analysts monitor these specific stocks due to their exposure to high-yield segments of the mortgage market. As the sector moves toward the 2027 milestone, the ability of these firms to manage asset quality while expanding their loan books will be a deciding factor in reaching these valuation targets.
