Home First Finance Company India Limited , a prominent player in the affordable housing finance sector, has reported a robust 28.6% year-on-year growth in Assets Under Management (AUM) for the quarter ended June 30. The company's AUM reached Rs. 13,479.00 crores, marking a 6% increase from the previous quarter.

Key Financial Highlights

• Disbursements stood at Rs. 1,243.00 crores, the second-highest in the company's history.
• Profit After Tax (PAT) increased by 35.5% year-on-year to Rs. 119.00 crores.
• Net Interest Margin (NIM) improved to 5.2% from 5.1% in the previous quarter.
• The company successfully raised Rs. 1,250.00 crores through its first Qualified Institutional Placement (QIP).

Credit Rating Upgrade and Capital Position

Home First Finance received credit rating upgrades to AA (Stable) from ICRA, India Ratings, and CARE. This upgrade, coupled with the successful QIP, has significantly strengthened the company's capital base. The Capital Adequacy Ratio stands at a robust 49.6%, with Tier I at 49.2%.

Asset Quality

The company experienced a seasonal uptick in asset quality metrics:

• 1+ Days Past Due (DPD) rose to 5.4% (up 90 bps quarter-on-quarter)
• 30+ DPD increased to 3.5% (up 50 bps quarter-on-quarter)
• Gross Stage 3 assets stood at 1.8% (up 10 bps quarter-on-quarter)

The management noted that the increase was more pronounced in the Surat and Coimbatore-Tirupur regions but expects normalization over the next two quarters.

Operational Highlights

• The company expanded its physical presence to 158 branches.
• Total employee strength increased to 1,709.
• Home First's origination market share in the Rs. 5-25 lakh ticket size segment improved from 1.5% in FY22 to 2.3% in FY25.

Technology Initiatives

Home First launched "Pulse", an omnichannel Conversational AI platform, enabling integrated customer interactions across various channels in seven Indian languages. The company also implemented internally developed enterprise-grade Document Management and Treasury Management Systems.

Management Commentary

Manoj Viswanathan, MD & CEO, stated, "Q1 was marked by two important events in our history: First, we raised Rs. 1,250.00 crore through our first QIP, which has significantly increased our net worth and further strengthened our capital base. Also, our long-term credit rating was upgraded to AA (Stable) by ICRA, India Ratings and CARE."

Nutan Gaba Patwari, CFO, commented on the cost of borrowings, "Our reported cost of borrowing is competitive at 8.4% (Ex- co-lending), enabling us to maintain healthy spreads. With the recent rate cuts and an improved long-term rating, we expect the cost of borrowing to improve in Q2."

Future Outlook

Home First Finance maintains its annual disbursement guidance of Rs. 5,600.00-5,800.00 crores and credit cost guidance of 30-40 basis points. The company remains confident in its ability to harness the multi-decade growth opportunity in the affordable housing finance sector, supported by its strong business model and the government's continued focus on housing initiatives.

Home First Finance Company India Limited (Home First) has unveiled its strategic financial targets for the fiscal year 2026, showcasing a robust outlook for growth and profitability. The company's management shared these insights during a recent earnings conference call, highlighting key areas of focus and expected improvements in financial metrics.

Disbursement and Cost Optimization

Home First has set an ambitious disbursement target of Rs 5,600-5,800 crores for the fiscal year 2026. This aggressive goal underscores the company's confidence in its market position and growth potential in the housing finance sector.

In a move to enhance profitability, Home First anticipates a significant reduction in its cost of borrowing. The company expects this cost to decrease to approximately 8.00% by March, representing a substantial drop of 50-60 basis points. Despite this reduction, Home First aims to maintain its spreads within the range of 5.00-5.25%, indicating a balanced approach to managing its interest margins.

Profitability and Efficiency Targets

The company has outlined clear objectives for improving its return metrics:

• Return on Equity (ROE): Home First is targeting a 15.00% ROE within the next 5-6 quarters, reflecting its commitment to enhancing shareholder value.
• Return on Assets (ROA): The company aims to push its ROA close to 4.00%, indicating a focus on efficient asset utilization.
• Operating Expenses: Home First plans to keep its operating expenses to assets ratio between 2.60-2.70%, demonstrating a commitment to operational efficiency.

Risk Management and Diversification

In terms of risk management, Home First has provided guidance on credit costs, projecting them to be in the range of 30-40 basis points for FY26. This relatively low figure suggests the company's confidence in its underwriting standards and the quality of its loan portfolio.

Additionally, Home First is looking to diversify its business model by increasing its co-lending contribution. The company plans to raise this to 10.00% of disbursements, potentially allowing for risk-sharing and access to a broader customer base.

Conference Call and Investor Relations

The company's proactive approach to investor relations was evident in its recent activities. According to the LODR (Listing Obligations and Disclosure Requirements) data, Home First conducted an earnings conference call for the quarter ended June 30, 2025, on July 28, 2025. The company has made the audio recording of this call available on its website, demonstrating transparency in its communications with investors and analysts.

Furthermore, Home First officials engaged in one-on-one meetings with investors and analysts on the same day, referring to publicly available documents during these interactions. This engagement underscores the company's commitment to keeping the investment community well-informed about its strategies and performance.

As Home First sets these ambitious targets, the market will be closely watching the company's execution in the coming quarters. The combination of growth in disbursements, cost optimization, and focus on profitability metrics positions Home First as a company aiming for sustainable and profitable growth in the competitive housing finance sector.