Home First Finance Company India Limited

Home First Finance reported strong Q3 FY26 results with AUM growing 24.9% YoY and 5.3% QoQ to Rs. 14,925 crore. Disbursements reached an all-time high of Rs. 1,318 crores, marking a 10.5% YoY and 2.2% QoQ increase, with monthly disbursements crossing Rs. 500 crores for the first time in December 2025. Profit After Tax (PAT) grew 44% YoY and 6.3% QoQ to Rs. 140 crores, with a Return on Assets (RoA) of 4% and Return on Equity (RoE) of 13.7%.

Asset quality metrics remained healthy, with 1+ DPD improving by 20 bps QoQ to 5.3%. However, Gross Stage 3 increased by 10 bps QoQ to 2%. Management expressed confidence that Stage 3 will improve going forward^⏳ due to better early delinquency resolution and overall collection efficiency, which is showing divergence from bounce rates. The company maintains a conservative provisioning approach with a total provision coverage of 40.4%.

Gujarat successfully overcame anticipated tariff impact^🌐s, showing strong growth and stable asset quality. Maharashtra re-established a strong growth trajectory. Tamil Nadu, which faced tariff-related delinquency and team churn, is stabilizing, with a turnaround expected from Q2 FY27. Uttar Pradesh is being approached with a calibrated strategy, aiming to be a large contributor from FY28. Karnataka is emerging strongly, while Rajasthan, MP, AP, and Telangana continue to deliver planned growth.

Technology remains a core focus, with in-house solutions driving efficiency. A new grade document system was developed for secure document management. Digital adoption is strong, with 81% of approvals via account aggregator, over 80% of loans digitally fulfilled, and 96% of customers registered on the mobile app, with 85% of requests raised digitally. Several AI pilots are in progress, expected to yield results in coming years.

Total interest income for the quarter was Rs. 429 crores, up 20.5% YoY. Portfolio yields remained constant at 13.4%, while cost of borrowing (ex-co-lending) contracted by 10 bps to 8%, leading to a Net Interest Margin (NIM) of 6.0%, up from 5.4% last quarter. The funding profile is diversified, with 57% from banks, 16% from NHB, and 20% from assignment and co-lending. Co-lending is expected to contribute 10% of AUM as the company scales.

The company targets 25% AUM growth for both FY26 and FY27, aiming for Rs. 20,000 crores AUM by March 2027. The long-term vision is to reach Rs. 35,000 crores by 2030, implying a 20%-23% annual AUM growth. Branch expansion plans include 6-8 additions in Q4 FY26 and 25-30 in FY27, focusing on states like MP, Andhra Pradesh, Tamil Nadu, and Maharashtra.

The affordable housing market is seeing a shift, with lower ticket sizes (below Rs. 10 lakhs) shrinking, and growth moving to the Rs. 10-40 lakhs segment due to increasing incomes and inflation. Management noted that customer defaults are often triggered by unforeseen family events (medical, job loss) and a lack of immediate liquidity. Recent improvements in the macro environment are helping customers manage these liquidity challenges, contributing to better collection efficiency.