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    Home First Finan

    HOMEFIRSTGood
    Financial Services·23 Jan 2026
    Management Summary

    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.

    Highlights

    7

    • AUM reached ₹14,925 crore, growing 24.9% YoY and 5.3% QoQ.

    • Quarterly disbursements hit an all-time high of ₹1,318 crore, up 10.5% YoY.

    • Profit After Tax (PAT) increased to ₹140 crore, up 44% YoY and 6.3% QoQ.

    • Net Interest Margin (NIM) expanded to 6.0% from 5.4% in the previous quarter.

    • Asset quality showed mixed signals: 1+ DPD improved to 5.3% (down 20bps QoQ), while Gross Stage 3 (GNPA) rose slightly to 2.0% (up 10bps QoQ).

    • Cost of borrowing (ex-co-lending) contracted by 10 bps to 8.0%.

    • Digital adoption remains high with 81% of approvals facilitated via account aggregator framework.

    Concerns

    1

    • Tamil Nadu Asset Quality

    Key financials

    Single quarter

    06 metrics
    1. 01AUM₹14,925 Cr+24.9%YoY
    2. 02PAT₹140 Cr+44%YoY
    3. 03NIM6%
    4. 04Gross Stage 32%+5%QoQ
    5. 05RoA4%

    Segment breakdown

    Individual Housing Loans
    83% Share of Origination
    LAP
    15% AUM Mix140% GNPA
    List

    Guidance & targets

    5
    CategoryTargetPriority
    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

    Risks & concerns

    4
    RiskSeverity

    Tamil Nadu Asset Quality

    Faced tariff-related delinquency and team churn; recovery expected only by Q2 FY27. — Both acknowledged

    high

    Aggressive Balance Transfers (BT-out)

    Competitors offering sub-12% rates; management is renewing retention efforts to stabilize BT-out at 6-6.5%. — Analyst acknowledged

    medium

    Regulatory Impact (Labour Code)

    One-time gratuity provision of ₹3.3 crores impacted OPEX and earnings in Q3. — Management acknowledged

    low

    Areas of Evasion(1)

    • Specific disbursement targets for FY27 were not provided, citing multiple flexible variables.

    Q&A highlights

    3

    “The target is to end the year at 25% AUM growth... uptake in numbers internally, in origination numbers, etc., which will eventually translate into disbursal.”

    Analysts were concerned that disbursements were slightly lower than expected; management clarified that internal origination numbers are picking up.

    asked by Abhijit Tibrewal, Motilal Oswal

    1 min read5 chapters

    Detailed Narrative

    01

    Record Disbursements Amidst Geographic Headwinds

    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.

    02

    Asset Quality Stabilization and Geographic Stress

    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.

    03

    NIM Expansion and Cost Management

    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%.

    04

    Strategic Focus on Digital and Co-lending

    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.

    05

    Long-term Vision and Leadership Stability

    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.

    This is an AI-generated summary of a publicly available earnings call transcript. It is for informational purposes only and does not constitute investment advice, a recommendation, or an endorsement. inve.money is not a SEBI-registered investment advisor. Please consult a qualified financial advisor before making any investment decisions.