Home First Finance Company India Limited reported a 34.5% year-on-year increase in profit after tax to ₹160 crore for the quarter ended June 30, 2026, driven by a 38.2% surge in net interest income and disciplined pricing strategies. The affordable housing finance company also announced that CFO Nutan Gaba Patwari will step down from her executive responsibilities effective August 31, 2026, after eight years of service, with the Board currently evaluating candidates for the role.

The company’s financial performance was underpinned by proactive liability management and strong asset growth. Total income rose 18.6% year-on-year to ₹540 crore. Net interest margin expanded to 6.0% from 5.9% in the previous quarter, aided by a 10 basis point sequential reduction in the cost of borrowing to 7.8%. Pre-provision operating profit grew 32.9% year-on-year to ₹224 crore, demonstrating operating leverage as the balance sheet scaled.

Key Financial Metrics

Asset quality remained stable during the quarter, with 1+ days past due (DPD) flat at 4.7%, 30+ DPD at 3.2%, and Gross Stage 3 assets at 1.8%. Provision coverage on Stage 3 assets stood at 23.4%, while total provision coverage including management overlays was 45.3%. The capital adequacy ratio decreased slightly to 42.6% from 44.1% in March 2026, with Tier 1 capital at 42.2%. Book value per share was ₹429.

What the Numbers Show

Disbursement growth of 31.0% year-on-year was equally driven by volume expansion and value migration, according to MD & CEO Manoj Viswanathan. The share of loans above ₹25 lakh increased from 14% to 18% over the last year, reflecting rising customer incomes and aspirations. Despite this shift towards higher ticket sizes, origination yields remained healthy at 13.0%, as the company continues to serve customers who face documentation challenges with larger banks. This segment stability has allowed Home First to maintain its targeted spread range of 5% to 5.25%, insulating margins from significant compression despite the changing portfolio mix.

Operational and Strategic Updates

The company expanded its distribution network by adding four branches in Gujarat, Andhra Pradesh, Tamil Nadu, and Madhya Pradesh, bringing the total to 175 branches and 373 touch points. Employee headcount increased by 133 to 1,988, primarily in customer-facing roles. Individual housing loans accounted for 83% of the portfolio, reinforcing the granular secured nature of the business.

On the technology front, Home First operationalized ‘Cue’, an AI-orchestrated omnichannel customer communications platform, and deployed AI models for bureau analysis and bank statement analysis to improve underwriting efficiency. The company certified 100 additional homes under its Green Homes initiative, reaching a cumulative total of 550.

Regarding funding, 57% of borrowings were from private and public banks, 14% from NHB, and 21% from assignment and co-lending. Co-lending disbursements were ₹46 crore, taking the book to ₹617 crore or 3.6% of AUM. Management noted that co-lending momentum had been weak due to process changes but expects stabilization as partner banks align with new policies.

Home First Finance Company India Limited reported a 34.5% year-on-year increase in net profit after tax (PAT) to ₹160 crore for the quarter ended June 30, 2026. The affordable housing finance lender achieved this growth despite a modest 18.6% rise in total income to ₹540 crore, indicating improved operational efficiency and margin expansion. Assets Under Management (AUM) grew robustly by 25.7% to ₹16,938 crore, while quarterly disbursements hit a record high of ₹1,628 crore, up 31.0% from the previous year. These figures were approved by the Board of Directors on July 27, 2026, and published in Mint and Pratahkal newspapers on July 28, 2026, fulfilling disclosure obligations under Regulation 47 of the SEBI Listing Regulations.

Financial Performance Highlights

The company’s pre-provision operating profit (PPOP) rose sharply by 32.9% to ₹224 crore, outpacing revenue growth and contributing to a significant improvement in return on assets (RoA). RoA expanded by 50 basis points to 4.2%, while the cost-to-income ratio contracted by 150 basis points to 32.7% from 34.2% in Q1FY26. This efficiency gain underscores management’s ability to control expenses amidst rapid asset expansion.

Asset Quality and Capital Position

Asset quality remained stable with Gross Stage 3 assets holding steady at 1.8% of Principal Outstanding, unchanged from the previous quarter and year. The company maintains a strong capital adequacy ratio of 42.6%, with Tier I capital at 42.2% as of June 2026, providing ample buffer for future lending activities. Manoj Viswanathan, Managing Director & CEO, attributed the strong performance to robust asset expansion and stable spreads in the affordable housing segment.

Governance and Regulatory Compliance

The financial results were reviewed by joint statutory auditors B S R & Co. LLP and Batliboi & Purohit, who issued unmodified conclusions. Shreyans Bachhawat, Company Secretary and Compliance Officer, filed the intimation with BSE Limited and The National Stock Exchange of India Limited pursuant to Regulation 33 read with Regulation 47(1) of the Listing Regulations. A dividend of ₹5.20 per share for FY26 was paid during the quarter. Trading windows for designated persons are scheduled to reopen on July 30, 2026.

What the Numbers Show

The divergence between the 18.6% revenue growth and 34.5% profit growth highlights a period of operational leverage for Home First Finance. The expansion in RoA by 50 basis points alongside a contraction in cost-to-income ratio suggests that the company is successfully scaling its operations without proportional increases in overheads. This efficiency, combined with record disbursements, positions the lender well for continued market share gains in the affordable housing finance sector.