HOMEFIRST - Investment Analysis: Buy Signal or Bull Trap?
Back to ListInvestment Rating: 3.9
| Stock Code | HOMEFIRST | Market Cap | 12,445 Cr. | Current Price | 1,186 ₹ | High / Low | 1,519 ₹ |
| Stock P/E | 25.1 | Book Value | 386 ₹ | Dividend Yield | 0.31 % | ROCE | 11.4 % |
| ROE | 16.5 % | Face Value | 2.00 ₹ | DMA 50 | 1,134 ₹ | DMA 200 | 1,167 ₹ |
| Chg in FII Hold | 0.83 % | Chg in DII Hold | -1.23 % | PAT Qtr | 140 Cr. | PAT Prev Qtr | 132 Cr. |
| RSI | 57.4 | MACD | 17.2 | Volume | 1,57,771 | Avg Vol 1Wk | 3,45,210 |
| Low price | 839 ₹ | High price | 1,519 ₹ | PEG Ratio | 0.93 | Debt to equity | 2.40 |
| 52w Index | 51.0 % | Qtr Profit Var | 44.0 % | EPS | 49.4 ₹ | Industry PE | 16.4 |
📊 Analysis: HomeFirst shows decent fundamentals with ROE (16.5%) and moderate ROCE (11.4%). Valuations are slightly stretched with a P/E of 25.1 compared to industry average of 16.4, but PEG ratio (0.93) indicates growth is fairly priced. Debt-to-equity (2.40) is high, which adds risk, though quarterly PAT growth (+44%) highlights strong earnings momentum. Dividend yield (0.31%) is negligible. Current price (₹1,186) is above both 50 DMA (₹1,134) and 200 DMA (₹1,167), reflecting bullish momentum. RSI (57.4) suggests neutral-to-slightly overbought conditions, while MACD (17.2) indicates positive sentiment. The ideal entry zone lies between ₹1,100–₹1,150 for long-term investors. If already holding, maintain positions for 3–4 years, leveraging growth potential, but consider partial profit booking near ₹1,480–₹1,500 resistance levels.
✅ Positive
- ROE (16.5%) reflects decent capital efficiency.
- Quarterly PAT growth (₹140 Cr vs ₹132 Cr) shows strong earnings momentum (+44%).
- PEG ratio (0.93) suggests valuations are aligned with growth potential.
- FII holdings increased (+0.83%), reflecting foreign investor confidence.
⚠️ Limitation
- High debt-to-equity ratio (2.40) increases financial risk.
- P/E (25.1) is above industry average (16.4).
- Dividend yield (0.31%) is negligible for income-focused investors.
📉 Company Negative News
- DII holdings decreased (-1.23%), showing cautious domestic sentiment.
- High leverage may limit flexibility in downturns.
📈 Company Positive News
- EPS at ₹49.4 provides a strong earnings base.
- MACD (17.2) indicates bullish momentum in near term.
- Volume stability (1.57L vs avg 3.45L) shows consistent investor interest.
🏭 Industry
- Housing finance sector benefits from rising demand for affordable housing.
- Industry PE (16.4) is lower than HomeFirst, suggesting peers may offer better valuations.
🔎 Conclusion
HomeFirst is a growth-oriented housing finance company with decent profitability and strong earnings momentum, but high leverage and stretched valuations add risk. Ideal entry is around ₹1,100–₹1,150. Existing holders should maintain positions for 3–4 years, leveraging growth, while booking profits near ₹1,480–₹1,500 resistance levels.
Would you like me to extend this with a peer benchmarking overlay (LIC Housing Finance, Can Fin Homes, PNB Housing Finance) so you can compare HomeFirst’s valuation and profitability against its closest housing finance peers?