Home First Finance Company India Ltd. share price target

Exhibits strong leadership in the affordable housing space

Home First Finance Company (HFFC) reported robust 3Q FY25 results driven by continued growth in disbursals (Rs 1,193 crore, +18.4% y-o-y, +1.4% q-o-q). AUM reached Rs 11,945 crore (+32.6% y-o-y, +6.4% q-o-q).

Home First Finance (HOMEFIRST)’s 3QFY25 PAT grew 24% YoY to INR974m (in line). NII grew 21% YoY to INR1.6b (in line). Other income grew 42% YoY to INR517m (10% above MOFSLe), fueled by higher insurance commission income.

We met with the senior management of Home First Finance, represented by Mr. Manoj Viswanathan, MD & CEO, and Ms. Nutan Gaba Patwari, CFO, to gain insights into the current industry dynamics in affordable housing finance and the way forward for the company.

Home First Finance Company (HFFC) reported strong 2Q FY25 results with continued momentum in disbursals (Rs 1,177 crore, +22.7% y-o-y, +1.2% q-o-q).
AUM exhibited robust growth to reach Rs 11,229 crore (+34.2% y-o-y, +7.2% q-o-q).

Home First Finance (HOMEFIRS)’s 2QFY25 PAT grew 24% YoY to INR922m (in line). 1HFY25 PAT grew 25% YoY to ~INR1.8b and we expect 2HFY25 PAT to grow ~23% YoY.

Home First Finance Company (HFFC) reported strong 1Q FY25 results as the company crossed the Rs 10,000 crore AUM milestone, clocking a robust 34.5% y-o-y growth to reach Rs 10,478 crore as of 31 June 2024.
Loan disbursals increased by 29.9% y-o-y to Rs 1,162 crore during the quarter.

1QFY25 PAT grew 27% YoY to INR878m (in line). NII grew 18% YoY to INR1.46b (in line). Other income grew 34% YoY to INR382m.

Hits AUM milestone with in-line operating metrics

Home First in May’24 crossed the AUM milestone of ~INR100b, delivering
an AUM CAGR of ~28% over FY20-24. The company has identified Uttar
Pradesh (UP), Madhya Pradesh (MP) and Rajasthan as its emerging states,
which will help Home First sustain AUM growth.

Stellar AUM growth with stable operating metrics

Home First Finance’s 4QFY24 PAT grew 30% YoY to INR835m (in line), while its FY24 PAT grew 34% YoY to INR3.1b.

The highlight of Home First Finance’s (HomeFirst) Q2FY24 result, including the last seven quarters, is steady sequential earnings growth in the range of 5-8% in each quarter and sustained AUM growth at 8% QoQ during the past 8 quarters.
The same resulted in RoE expanding to 15.6% by Q2FY24 from 6% in Q2FY21.

Strong growth momentum continues

Home First Finance (HFFC) reported another set of steady numbers for the quarter, with strong AUM growth (33% YoY and 8% QoQ), and sequential rise in disbursements (35% YoY and 3% QoQ at ? 8,952mn). There has been a positive uptick in the spreads by 20bps QoQ at 5.7% as against 5.5% in the previous quarter.

Key highlight of Home First Finance’s (HomeFirst) Q1FY24 result is that it is sustaining steady sequential earnings for 6th consecutive quarter. Reported PAT grew 8% QoQ / 35% YoY to INR691mn in Q1FY24 and RoE expanded to 15%. RoE expansion was mainly driven by the company’s ability to sustain growth momentum and maintain steady ~4% RoA even while expanding the balance sheet.

We attended Home First Finance’s (HomeFirst) tech and underwriting session, in which the company showcased how it services home loan customers in affordable HL space. Key differentiators include: a) End-to-end digital loan process with three different apps (but integrated with each other via SalesForce) for connectors, customers and employees

Home First Finance has reported a healthy set of numbers portraying steady growth in disbursements at ? 8,691mn as of Q4FY23 (up by 11.4% QoQ) and ? 30,129mn as of FY23 (up by 48.4% YoY) on account of strong execution, leading to an AUM growth by 33.8% YoY and 6.6% QoQ. The PAT stood at ? 640mn as of Q4FY23 and ? 2,283mn as of FY23 supported by stable growth in the NIM at 6.1% and 6.4% respectively.