Home First Finance reported a 29.1% YoY profit jump to Rs 170 crore for Q2 FY27. Assets Under Management grew 27% to Rs 18,010 crore, with asset quality improving as Gross Stage 3 fell to 1.7%.
Home First Finance Q2 Profit Hits Rs 170 Crore
Home First Finance Company India Ltd reported a standalone Profit After Tax (PAT) of Rs 170 crore and an AUM of Rs 18,010 crore for the quarter ended September 2024.
Reader Takeaway: Strong 27% AUM growth and improved efficiency provide momentum, though investors should track co-lending recovery in Q3.
What just happened
Home First Finance posted a robust second quarter with a 29.1% year-on-year growth in net profit. The company’s AUM reached Rs 18,010 crore, marking a 27% increase compared to the same period last year. Disbursements for the quarter grew 32.2% YoY to Rs 1,705 crore. Asset quality also showed progress, with Gross Stage 3 assets improving by 10 basis points sequentially to 1.7%.
Why this matters
The company’s operational efficiency is steadily improving, with the cost-to-income ratio dropping to 30.8% from 32.7% in the previous quarter. The Return on Equity (ROE) also saw a 40 basis point improvement to 14.9%. These metrics reflect a scaling business that is managing its cost base effectively while growing its loan book.
What changes now
Management has reaffirmed its guidance of 25% YoY AUM growth, aiming for a portfolio of Rs 20,000 crore by March 2027. The firm is also targeting a 15% exit ROE for FY27 and 16% for FY28. To support this growth, the company continues its expansion, adding 6 branches this quarter to reach 181 locations.
Risks to watch
Co-lending disbursements remained muted at Rs 1.8 crore this quarter due to the implementation of new RBI guidelines with partners. Investors should watch for a projected uptick in these volumes in Q3. Additionally, any significant shifts in the interest rate environment could impact Net Interest Margins (NIM), which the company currently maintains at 6.0%.
What to track next
The company’s ability to scale its AI-driven tech stack to reduce turnaround times remains a critical performance driver. Additionally, leadership changes in Tamil Nadu are expected to reverse recent sluggish growth trends in that state, which will be a key performance indicator in the coming quarters.