HOMEFIRST - Fundamental Analysis

Last Updated Time : 02 Aug 25, 12:58 am

Fundamental Rating: 3.8

Here’s a full-spectrum evaluation of Home First Finance Company (HOMEFIRST) — a nimble housing finance player growing steadily but facing valuation and balance sheet concerns 🏡📊

📌 Core Financials Breakdown

Earnings Momentum

PAT increased from ₹105 Cr. to ₹119 Cr. — a solid QoQ growth of 13.3%, and YoY gain of 35.5% shows compounding traction.

EPS of ₹44.3 ₹ reflects healthy profitability for its asset base.

Return Metrics

ROE: 16.5% — commendable; shows strong profitability on equity.

ROCE: 11.4% — decent but below top-tier NBFC benchmarks.

Leverage Position

Debt-to-equity: 3.79 — quite high, but typical in housing finance; suggests reliance on borrowed capital to drive lending.

Important to monitor funding cost trends and asset-liability maturity profiles.

📉 Valuation Analysis

Metric Value Interpretation

P/E Ratio 30.0 Reasonable given growth and industry trend

P/B Ratio ~4.27 Slight premium vs. peers; typical of high-growth finance

PEG Ratio 1.11 Fair — valuation moderately aligns with expected growth

Intrinsic Value ~₹1,100–₹1,200 Current price of ₹1,197 is near fair value

Dividend Yield 0.31% Low — confirms reinvestment focus rather than payouts

Valuation feels balanced — neither screamingly cheap nor egregiously expensive.

🛠️ Business Model & Moat

Focused on affordable home loans for salaried and self-employed customers in urban/semi-urban India.

Tech-led onboarding and underwriting reduce overhead costs.

Competitive edge lies in last-mile credit delivery and granular risk control, though crowded with peers like Aptus Value, Aavas Financiers, etc.

📈 Technical Pulse & Entry Zone

RSI: 33.6 — nearing oversold territory, hinting at a bottoming-out phase.

MACD: –17.6 — bearish momentum but flattening; potential inflection.

Price is below DMA 50 & close to DMA 200, which supports a cautious accumulation strategy.

🎯 Suggested Entry Zone

Value buy zone: ₹1,100–₹1,170

Aggressive accumulation: ₹1,050–₹1,100 (on broader correction)

🧭 Long-Term Holding Guidance

✅ Strong lending growth, targeted customer base, and tech integration

⚠️ High leverage and competition in housing finance make it a watchful hold

🟡 Good fit for a 5+ year portfolio, especially for investors bullish on India's urban housing theme

If you’d like a peer comparison with Aptus Value Housing, Aavas Financiers, or even larger players like Can Fin Homes, I’m ready to run the numbers and sharpen your picks 🧮📌

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