Home First Finance delivered a strong Q3 FY26 with record disbursements and robust PAT growth of 44% YoY. While the company faced some asset quality headwinds in Tamil Nadu and one-time gratuity costs due to the new labour code, management expressed high confidence in returning to a 25% AUM growth trajectory. The MD & CEO also explicitly quashed rumors regarding his potential exit, reinforcing leadership stability.
vs Q4 FY26
Notable Quotes from the Call
Most Confident Moment
MD & CEO explicitly reiterating he has no plans to move out of Home First, quashing baseless rumors.
Least Confident Moment
CFO acknowledging a slight downward adjustment (₹300 Cr) to the medium-term AUM target due to the credit cycle.
| Metric | Value | YoY |
|---|---|---|
| AUM | ₹15K Cr | +24.9% YoY |
| PAT | ₹140 Cr | +44.0% YoY |
| NIM | 6% | — |
| Gross Stage 3 | 2% | — |
| RoA | 4% | — |
| Cost to Income | 32% | — |
Segment Breakdown
| Metric | Latest | Trend |
|---|---|---|
| AUM(crores) | 15878 | |
| PAT(crores) | 140 | |
| GNPA | 1.7% | |
| NIM | 6% | |
| ROE | 16.5% | |
| Gross Stage 3 | 1.8% |
| Category | Target | Priority |
|---|---|---|
| Volume | AUM Growth→25% | High |
| Volume | AUM Target→₹19,600-19,700 crores | Medium |
| Volume | AUM Target 2030→₹35,000 crores | Medium |
| Margin | Book Spreads→5.0%-5.2% | High |
| Capacity | Branch Additions→25-30 | High |
| Severity | Risk |
|---|---|
high | Tamil Nadu Asset Quality Faced tariff-related delinquency and team churn; recovery expected only by Q2 FY27. Both |
medium | Aggressive Balance Transfers (BT-out) Competitors offering sub-12% rates; management is renewing retention efforts to stabilize BT-out at 6-6.5%. Analyst |
low | Regulatory Impact (Labour Code) One-time gratuity provision of ₹3.3 crores impacted OPEX and earnings in Q3. Management |
Areas of Evasion(1)
Home First achieved its highest-ever quarterly disbursements of ₹1,318 crore, representing a 10.5% YoY increase. Monthly disbursements crossed the ₹500 crore milestone for the first time in December 2025. This growth was achieved despite tightening credit filters in previous quarters and facing specific challenges in Tamil Nadu and Gujarat.
The 1+ DPD improved by 20 bps QoQ to 5.3%, signaling better early-stage collections. However, Gross Stage 3 assets rose slightly to 2.0%. Management identified Tamil Nadu as a primary source of stress, where NPAs are significantly higher (15-18% of the state's cohort) due to local tariff issues and team instability, though a turnaround is expected by FY27.
Net Interest Margin (NIM) saw a significant jump to 6.0% from 5.4% in Q2, aided by lower borrowing costs and optimized liquidity. The cost of borrowing (excluding co-lending) fell to 8.0%. Reported OPEX was impacted by a one-time📎 ₹3.3 crore gratuity provision related to the new labour code; excluding this, the cost-to-income ratio would have been 31%.
Digital adoption remains a core pillar, with 81% of approvals facilitated via account aggregators and 96% of customers registered on the mobile app. The company is also scaling its co-lending business, which currently stands at ₹585 crore (3.9% of AUM), with a long-term target to reach 10% of AUM to cater to higher ticket size segments.
Management reiterated its vision to reach ₹35,000 crore AUM by 2030, implying a 20-23% CAGR. MD & CEO Manoj Viswanathan addressed and dismissed rumors regarding his departure, stating he has no plans or intent to move out, which provided significant reassurance to analysts during the call.