Downgrades

BUY with a target price of Rs 957, implying an upside of 10% from the current market price (CMP)

Home First Finance’s (HOMEFIRS) 2QFY26 PAT grew 43% YoY to INR1.32b (in line). PAT in 1HFY26 grew ~39% YoY, and we expect PAT in 2HFY26 to grow 48% YoY. NII grew ~32% YoY to INR2.1b (in line).

LIC Housing Finance’s (LICHF) 2QFY26 PAT grew ~2% YoY to ~INR13.5b (in line). NII in 2QFY26 rose ~3% YoY to ~INR20.4b (in line). Fee and other income grew 74% YoY to INR1.4b.

Asset quality experienced slight improvement, with GNPA/NNPA declining to 0.94%/0.48% from 0.98%/0.54% in Q2FY26. The company's credit cost remained very low, with provisioning largely limited to new growth, highlighting effective...

After successfully strengthening its retail asset franchise during FY24–25, PNB Housing Finance (PNB HF) has shifted its focus towards enhancing profitability going ahead, and its highest quarterly (since FY21) RoE at >13% during Q2FY26 is a reflection of sustained improvement across financial parameters despite management transition.

LICHF's financial performance in Q1FY26 was stable. Despite the quarter being relatively subdued, the company is optimistic that discernible signs of progress have emerged, paving the way for an anticipated pickup in growth from Q2 onwards, consistent with its historical pattern. The company is confident about its asset quality and has adequate provisions in place. It has no major concerns on the NPA front and is upbeat about its future performance. However, competition in the industry is expected to increase, particularly from public sector banks, which may lead to pressure on margins due to a rate war. Additionally, the company may need to consider further cut rates to remain...

Aavas reported decline in disbursements post change in recognition process; disbursements de-grew by 5% YoY. Thus, AUM growth slowed down to 16% YoY vs 18% YoY (Q4FY25). Management revised guidance downwards to 18-20% vs 20-25% AUM growth for FY26. Asset quality deteriorated with GNPA at 1.22% vs 1.08% QoQ; further reported rise in 1+ dpd to 4.15% vs 3.39% led by seasonality. Spreads improved by 22bps QoQ to 5.11% due to decline in cost of funds. NII grew by 14% YoY led by improvement in NIMs; PPoP grew by 12% YoY led by higher operating expenses (up 21% YoY). PAT grew by 10% YoY led by higher...

AAVAS saw a weak quarter as disbursal growth fell by 43% QoQ (usually Q1 sees a 25-30% QoQ dip) and overall stress increased. Disbursals were ~17% lower to PLe since the company transitioned to a realization-based model for disbursal recognition to adopt a more conservative approach, also aligning with regulatory expectations. Credit flow for Jul'25 has normalized to Rs5.56.0bn vs avg. Rs3.8bn in Q1'26. While AAVAS has guided for an AuM growth for FY26E of 18-20%, we have factored an AuM CAGR of 17% due to the Q1'26...

Repco Home Finance’s (Repco) 1QFY26 PAT grew 2% YoY to INR1.1b (6% beat). NII in 1QFY26 grew ~8% YoY to ~INR1.8b (in line).

PNB Housing (PNBHF), on 31st Jul’25, announced that its MD and CEO, Mr. Girish Kousgi, has decided to step down from his role effective 28th Oct’25 to pursue external career opportunities.

LIC Housing Finance (LIC HF) continues to feel the heat from increasing competition, as reflected in AUM growth remaining subdued at 7% YoY / 1% QoQ and asset yield reducing 20bps YoY / QoQ to 9.6% in Q1FY26.

LIC Housing Finance’s (LICHF) 1QFY26 PAT grew ~5% YoY to ~INR13.6b (in line). NII in 1QFY26 rose ~4% YoY to ~INR20.7b (in line). Fee and other income grew 170% YoY to INR1.2b.

CANF saw a stable quarter as disbursals were in-line leading to AUM growth of 9.0% YoY, while NII was a beat at 3.7% due to lower cost of funds. Despite repo cut of 100bps, company expects NIM of 3.5% in FY26 (3.6% in FY25) as (1) certain portions of bank and NHB borrowings would be repriced lower due to their floating nature and (2) only 5% loans shifted from annual to quarterly reset (67% still at annual reset). Hence, we raise FY26E NIM by 9bps to 3.46%. While both Karnataka and Telangana are stabilizing in business terms, recovery has been slower due to state-specific issues. Disbursal and loan...

LICHF’s 4QFY25 PAT grew ~25% YoY to ~INR13.7b (~7% beat). FY25 PAT grew ~14% YoY to INR54.3b. 4Q NII declined ~3% YoY to ~INR21.7b (~6% beat).

We maintain our BUY recommendation on the stock

Aavas Financiers (Aavas) reported in-line Q4FY25 financial performance, evident in strong 6% QoQ AUM growth, steady 15bps credit cost, 46bps QoQ dip in 1+ DPD to 3.39% and RoA at 3.3%.

Can Fin Homes (CANF)’s 4QFY25 PAT grew ~12% YoY to ~INR2.3b (in line). FY25 PAT grew ~14% YoY to INR8.6b. 4Q NII grew ~6% YoY to ~INR3.5b (in line). Fees and other income stood at ~INR168m (PY: INR159m).