Target: ₹855
CMP: ₹755.30
We initiate coverage on India Shelter Finance with a constructive stance, underpinned by its differentiated positioning in the high-yield affordable housing segment. The company focuses on self-employed borrowers across tier-II/III markets, enabling superior growth and margins. As of December 2025, AUM stood at ₹9,819 crore with a 300+ branch network. Asset quality remains stable (Stage 3 about 1.5 per cent) with strong profitability. We expect 28-30 per cent AUM CAGR, driving sustained earnings compounding over the medium term. We initiate with Buy rating with target price of ₹855, valuing the stock at 2.0x FY27E P/BV.
India Shelter AUM stood at ₹9,819 crore as of December 2025, delivering strong multi-year growth (over 30 per cent CAGR). With a granular, in-house sourced portfolio and continued branch expansion (300-plus network), we expect AUM CAGR of 28-30 per cent over the next three years, supported by deep penetration in tier-II/III markets.
The company operates with structurally high spreads (>6 per cent) driven by a self-employed focused borrower mix and LAP exposure. Asset quality remains stable (Stage 3 about 1.5 per cent) with credit costs guided at 40-50 bps. We expect RoA to sustain at 5.5-6 per cent and RoE at 17-19 per cent over the medium term.
With a scalable branch-led model, strong underwriting discipline and favorable affordable housing tailwinds, India Shelter is well positioned for sustained high growth.