Using a two-stage Gordon Growth model, we arrive at a target price of Rs650 per share for Aadhar assuming CoEs of 12.2%, medium-term RoEs of 16%, and high growth phase of 10 years with expected growth of 20%. We assign price-to-book of 3.3x 9MFY27E BV.

Key downside risks for Aadhar are - Build-up of stress in LAP over and above expectations; roll-back from elevated GS3 getting disrupted due to activity slowdown also leading to growth slowdown.