HOMEFIRST - Investment Analysis

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

Investment Rating: 4.0

📊 Fundamental Analysis

Strengths

Strong ROE (16.5%): Indicates solid shareholder value creation.

Quarterly PAT Growth (35.5%): From ₹105 Cr to ₹119 Cr — consistent earnings momentum.

EPS of ₹44.3: Healthy earnings base for its price.

PEG Ratio of 1.11: Fairly valued relative to growth — a positive sign.

Institutional Confidence: FII (+1.19%) and DII (+2.07%) holdings are rising.

P/E of 30.0 vs. Industry PE of 20.2**: Slight premium, but justified by growth and quality.

Concerns

High Debt-to-Equity (3.79): Typical for housing finance, but needs monitoring for asset quality.

Low Dividend Yield (0.31%): Not ideal for income-focused investors.

Weak Technicals: RSI at 33.6 and MACD negative — indicates bearish momentum.

ROCE (11.4%): Moderate capital efficiency.

💡 Is It a Good Long-Term Investment?

Yes — HOMEFIRST is a promising long-term play in the affordable housing finance space. Strong ROE, consistent profit growth, and reasonable valuation make it attractive, especially for growth-oriented investors.

🎯 Ideal Entry Price Zone

Valuation-Based Entry: ₹1,100–₹1,150 This range is near the 200 DMA (₹1,166) and offers a good margin of safety.

Aggressive Entry: ₹950–₹1,100 If technical weakness persists, this zone aligns with historical support and offers upside potential.

🧭 Exit Strategy / Holding Period

If you already hold the stock

Holding Period: 3–5 years to benefit from compounding ROE and sector tailwinds.

Exit Strategy

Partial Exit near ₹1,500–₹1,550 if valuation stretches without matching earnings growth.

Full Exit if ROE drops below 12% or asset quality deteriorates significantly.

Re-evaluate if RSI crosses 75 or MACD turns sharply negative — could signal short-term peak.

Would you like a peer comparison with other housing finance companies like Aavas Financiers or Can Fin Homes?

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