3 housing finance stocks growing 30%+ with margins far above Bajaj

The growth momentum for these affordable housing finance companies has come from the government’s objective to aggressively promote home ownership amongst economically weaker sections in urban and rural areas.

The PMAY-U 2.0 Catalyst: Fueling the Sub-₹15 Lakh Mortgage Boom

For instance, The Pradhan Mantri Awas Yojana – Urban 2.0, which seeks to address the housing needs of 1 crore urban poor and lower middle-class families between 2024 and 2029. This scheme is targeted at economically weaker sections (EWS) and lower income groups with annual income ranging between Rs 3 to 6 lakh. Maximum housing loan available is Rs 25 lakh under this scheme.

As a result, affordable housing finance companies typically provide home loans between Rs 5 lakh to Rs 12 lakh.

Also, these affordable housing finance companies are providing other retail loan like high-margin loans against property and SME loans, amongst others, and they have Net Interest Margins (NIMs) superior to Bajaj Housing Finance, a leading player in housing finance segment.

Affordable housing finance companies have NIMs in the range of 5.8% to 7.7% in the June 2026 quarter, as compared to 3.7% for Bajaj Housing Finance in the quarter under review. It also needs to be highlighted that the loan portfolio of affordable housing finance companies is much smaller than that of Bajaj Housing Finance.

To help our readers understand this segment better, we selected three affordable housing finance companies who have successfully blended growth in their disbursements in the June 2026 quarter and at the same time enjoy strong net interest margins (NIMs) along with stable asset quality.

Here are our findings.

Aavas Financiers: How High-Margin SME Portfolios Drive 7.7% NIMs

Aavas Financiers’ disbursements grew nearly 41% y-o-y to Rs 1,613.9 crore and in its investor presentation, the company has highlighted that 83% of its loans are for less than Rs 15 lakh in the quarter.

Aavas Financiers has pointed out that 64% of its loans are for housing loans, 23% loans for SMEs and the remainder for loans against property (LAP) for FY26.

The company has 440 branches across 15 states in FY26 with the largest number in Rajasthan, Gujarat and Madhya Pradesh.

Aavas Financiers has impressive net interest margins (NIMs) from its diverse lending activities – it was 7.7% as compared to 7.48% a year earlier. Loans for SMEs and LAP are at typically much higher interest rates than home loans.

For perspective, Bajaj Housing Finance, a leading player in housing finance segment, has NIMs of 3.7% as compared to 3.9% a year earlier. Its disbursements grew 33% y-o-y to Rs 19,509 crore, and net profit grew 22.6% y-o-y.

Meanwhile, strong NIMs helped Aavas Financiers net interest income (NII) rise 16.5% y-o-y to Rs 323.9 crore.

And asset quality of Aavas Financiers was broadly stable – its net stage3 % (broadly equivalent to percentage of net NPAs for banks) was 0.7% as compared to 0.84% a year earlier.

Strong growth in loans and NIMs helped the company’s net profit grow 23% y-o-y to Rs 171.3 crore.

Home First Finance: Sustaining Asset Quality Amid 31% Disbursement Growth

Home First Finance Company India’s disbursements grew 31% y-o-y to Rs 1,628.4 crore. The company has highlighted home loans accounted for 83% of its total loans with an average loan of Rs 12 lakh. It also provides shop loans and loans against property.

The company’s marketing network includes 175 branches across 13 states / union territories.

Its NIMs was 6% as compared to 5.2% a year earlier. As a result, its NII grew a healthy 30.7% y-o-y to Rs 253.5 crore.

Asset quality was also fairly stable – its net stage 3 was 1.4% and similar to a year earlier.

Strong growth in loans and healthy NIMs enabled the company’s net profit to grow 34.5% y-o-y to Rs 159.8 crore.

Aptus Value Housing: Deep-Tier Market Penetration Yields an Industry-Leading 9% Spread

Aptus Value Housing Finance India’s disbursements grew 36% y-o-y to Rs 1,053 crore with a strong focus on small home loans in tier-II, III and IV towns. Home loans accounted for nearly 70% of its loan portfolio

The company has pointed to an average home loan size of Rs 9.7 lakh. In addition, it provides small business loans with an average size of Rs 9.1 lakh. The company has 372 branches in southern, western and eastern states with a strong focus on Andhra Pradesh, Tamil Nadu and Telangana.

Its spread was 9% as compared to 8.7% a year earlier. As a result, NII grew 16.5% y-o-y to Rs 360 crore.

Asset quality was broadly stable – net NPAs as a percentage of loans was 1.3% as compared to 1.5 % a year earlier.

Strong NII and NIMs helped net profit rise 19% y-o-y to Rs 260.9 crore.

Here’s a table that shows how the various affordable housing finance companies stack up against Bajaj Housing Finance.

Operational performance of affordable house finance companies v/s Bajaj Finance (June 2026 quarter)

Housing finance company	NIM / Spread (in %)	Net profit growth y-o-y (in %)
Aavas Financiers	7.7%	23%
Home First Finance Company India	6%	34.5%
Aptus Value Housing Finance India	9%	19%
Bajaj Housing Finance	3.7%	22.6%

Do note that given the big difference in size of balance sheets, this comparison is only for context with respect to a large player – Bajaj Housing Finance.

Capital Efficiency: Why Niche Lenders Are Beating Bajaj Housing in RoE

Aavas Financiers has a consolidated Return on Equity of 13.9%, according to Screener.in, while it is 15.7% for Home First Finance Company India and 20.1% for Aptus Value Housing Finance India.

The ‘efficiency’ leader amongst affordable housing finance companies

Name of housing finance company	Consolidated Return on Equity (in %)
Aavas Financiers	13.9%
Home First Finance Company India	15.7%
Aptus Value Housing Finance India	20.1%
Bajaj Housing Finance	12.1%

For perspective, Bajaj Housing Finance, a leading player in the broader housing finance industry, has a RoE of 12.1%, according to Screener.in.

The Valuation Verdict: Are These Growth Premiums Justified at 2.5x to 2.9x P/B?

Aavas Financiers ended 0.3% lower at Rs 1,400.9 on Tuesday. On the preferred valuation matrix, price-to-book value it trades at 2.9 times, according to Screener.in.

Home First Finance Company India ended 0.6% lower at Rs 1174.5 on Tuesday. On the above valuation matrix, the stock trades at nearly 2.8 times.

Aptus Value Housing Finance India ended 1.7% higher at Rs 257.5 on Tuesday. On the above valuation matrix, the stock trades at 2.5 nearly times.

Valuations of affordable housing finance companies v/s Bajaj Housing Finance

Housing finance companies	Price-to-book-value
Aavas Financiers	2.9 times
Home First Finance Company India	2.8 times
Aptus Value Housing Finance India	2.5 times
Bajaj Housing Finance	3.2 times

For perspective, Bajaj Housing Finance trades at nearly 3.2 times on the valuation matrix.

The affordable housing finance segment is expected to show strong growth over the next few years, in line with the government’s objectives.

Readers could add affordable housing finance companies to their watch list of stocks for 2026 and see if the anticipated growth over the next few years matches expectations.

Disclaimer:

Amriteshwar Mathur is a financial journalist with over 20 years of experience.

Disclosure: The writer and his family have no shareholding in any of the stocks mentioned in the article.

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