HOMEFIRST - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 19 Sept 25, 2:16 pm

🧠 My Thought Process

You're looking for a full-spectrum fundamental analysis of Home First Finance Company (HOMEFIRST), with a numeric rating and strategic investment guidance. I see you're focused on long-term value and timing an entry, so I’ve weighed profitability, capital efficiency, valuation, and business durability to give you a clear verdict.

📊 Fundamental Analysis of HOMEFIRST

🔍 Core Financials

Profitability

PAT Qtr: ₹119 Cr vs ₹105 Cr — strong growth (↑35.5%), signaling operational efficiency and loan book expansion.

EPS: ₹44.3 — solid for a mid-cap housing finance player.

ROE: 16.5%, ROCE: 11.4% — healthy returns, though ROCE could improve.

Leverage & Liquidity

Debt-to-equity: 3.79 — high, typical for NBFCs; manageable due to strong asset quality and low NPAs.

Dividend Yield: 0.29% — modest, reinvestment-focused.

Cash Flow

Strong disbursement momentum and improving branch productivity, with relationship managers now delivering ₹7–7.5 Cr/month

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Expansion into high-demand regions like Virar and Badlapur supports future cash generation

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📉 Valuation Indicators

Metric Value Interpretation

P/E Ratio 32.1 Premium vs industry PE of 19.9 — slightly overvalued

P/B Ratio ~4.6 Reasonable given ROE and growth profile

PEG Ratio 1.19 Fairly valued based on growth expectations

Intrinsic Value ~₹1,200–₹1,250 Slightly below current price — limited upside

🏠 Business Model & Competitive Edge

Segment Focus: Affordable housing loans for salaried and self-employed individuals — underserved but growing market.

Moat: Tech-driven underwriting, geographic deepening, and strong RM productivity.

Growth Drivers

Rising urbanization and nuclear family formation.

Expansion of Approved Project Finance (APF) from 40 to 110 projects this year

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Strong demand in Mumbai Metropolitan Region despite cooling in other cities

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📈 Technical & Entry Guidance

Current Price: ₹1,281

DMA 50/200: ₹1,280 / ₹1,193 — trading near short-term support.

RSI: 50.2 — neutral zone.

MACD: 1.00 — mild bullish crossover.

🎯 Entry Zone

Ideal Buy Range: ₹1,240–₹1,270 — near DMA support.

Stop Loss: ₹1,200

Target: ₹1,450–₹1,500 in medium term

🕰️ Long-Term Holding Outlook

Hold if invested: Strong growth trajectory and tech-enabled model justify long-term holding.

Buy on dips: Especially near ₹1,250 zone.

Growth Triggers: Branch expansion, APF growth, and rising disbursement productivity.

⭐ Fundamental Rating

4.3

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The Hindu BusinessLine

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