Home First Finance Company India (HOMEFIRS IN) – Q2FY27 Result Update – Healthy growth outlook; margins a key monitorable – BUY
Published on 29 Oct 2026
Disbursements/AUM in Q2 grew 32%/27% YoY to INR17bn/INR180.1bn, aided by stable regional teams, lower attrition & Tamil Nadu’s return to growth. Management reiterated ~25% AUM growth guidance in FY27, with upside risk from a pick-up in the southern states, and we build 26%/25% for FY27/FY28E. We expect NIM (calc.) to compress by 14/17bps to 6.0/5.8% in FY27/FY28E, due to repo-rate transmission. Opex/assets stood at 2.6% in Q2, with management guiding a ~10bps annual reduction. We build ~2.5% for FY27/28E. Asset quality was steady and credit cost stood at ~43bps in Q2. We build an improvement to 35/33bps for FY27/FY28E. We cut our FY28E earnings estimates by 1.7%, mainly to factor in i) the ~35bps ROA impact from the draft insurance distribution rules, to be partly cushioned by a higher LAP share, higher assignment income and pricing/fee changes and ii) higher CoF. We reduce the multiple to 2.5x (earlier 2.6x) with an unchanged TP of INR1,400. Maintain BUY.
