Buy Home First Finance; target of Rs 917: Arihant Capital

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26 Aug, 2025 12:21

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Home First Finance (HFFC) reported operational numbers was above our estimate on all front. It has reported profit of INR 46 cr (189% YoY/2% QoQ) as against our estimate of INR 40 cr driven by strong NII growth and controlled cost. Company has reported highest ever quarterly disbursement growth of 63% YoY/11% QoQ. Consequently, sequential loan growth was up by 8% for the second consecutive quarter. Collection efficiency and early bucket indicator of the company improving but it remains lower than pre-covid levels. Gross stage 3 assets (before RBI’s circular impact) stood flat QoQ at 1.7% aided by higher write offs. Due to RBI’s norms on NPA classification, loans amounting to INR 34 cr were classified as NPAs with GS 3 assets stood at 2.6%. Management looking to increase its branch count from 76 to 140 in the next 2 years and has a plan to cover 360 distribution point for achieving the higher growth.

We upgrade our rating on the stock to Buy from Accumulate with a revised TP of INR 917, based on 4x FY24E P/ABV.

At 17:30 Home First Finance Company India was quoting at Rs 700.45, down Rs 6.30, or 0.89 percent.

It has touched an intraday high of Rs 704.85 and an intraday low of Rs 679.55.

It was trading with volumes of 3,456 shares, compared to its thirty day average of 4,679 shares, a decrease of -26.14 percent.

In the previous trading session, the share closed down 1.58 percent or Rs 11.35 at Rs 706.75.

The share touched its 52-week high Rs 919.95 and 52-week low Rs 441.00 on 08 December, 2021 and 12 April, 2021, respectively.

Currently, it is trading 23.38 percent below its 52-week high and 59.83 percent above its 52-week low.

Market capitalisation stands at Rs 6,136.71 crore.

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