Brokerage firm ICICI Securities has initiated coverage on a non-banking financial company (NBFC) stock with a “buy” recommendation, anticipating a solid upside of as much as 59%.
The NBFC stock, Aye Finance, which has delivered a solid return of more than 80% in the last six months, appears to be ready for a further rally due to a formidable presence in India’s mass-affluent lending market, according to the brokerage firm.
Aye Finance shares have surged 82% over the last six months, according to BSE data. It hit a 52-week high of ₹197.95 on 21 July after hitting a 52-week low of ₹88.40 on 2 April this year.
In intraday trade on Tuesday, 15 September, the stock jumped more than 5%, despite stock market volatility.
What does ICICI Securities say about the stock?
ICICI Securities recommends buying the stock now despite its steep gains in the recent past. The brokerage firm has set the stock’s target price at ₹285, valuing it at 2 times FY28E P/BV.
The current target price implies an upside potential of almost 59% from its previous session close of ₹179.65 on the BSE.
ICICI Securities underscored that Aye is gradually emerging from an asset quality (AQ) cycle and has demonstrated a steady improvement in core earnings in recent quarters.
“Credit cost has consistently declined from 5% in FY26 to sub-4% in Q1FY27. Spread expanded to 11.6% by June 2026, up from 10.9% in June 2025, supported by a reduction of more than 45 basis points in the cost of funds (CoF), alongside an incremental CoF of 10.2% (book cost of 10.8%), which could further support spreads. Driven by enhanced operating efficiency, overall RoE improved to 16% by Q4FY26, from nearly 9–10% in the past seven quarters,” said the brokerage firm.
The brokerage firm highlighted that Aye Finance has a formidable presence in India’s mass-affluent lending market and is anchored by its niche funding offerings in the ₹1.5 lakh to ₹5 lakh ticket size segment.
“Most of its peers operate either below ₹1.5 lakh or above ₹5 lakh. Aye lays emphasis on bridging this gap. The company’s distinct business model is helping propel it as one of the fastest-growing NBFCs (FY20–26 AUM CAGR of nearly 26%) with improving earnings (2.7% RoA in FY26 versus 2% in FY23),” ICICI Securities said.
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Disclaimer: This article is for educational purposes only and does not constitute investment advice. The views and recommendations expressed are those of individual analysts or broking firms, not Mint. We advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and circumstances may vary.
