$HOMEFIRST : Strong Growth and Improving Asset Quality Drive Valuation Upside

The affordable housing finance (AHF) sector is rebounding from a previous slump marked by high delinquency rates. $HOMEFIRST (Home First) stands out as a strong value proposition due to its resilient asset quality and proven growth trajectory. Aggressive Distribution & Growth: Home First has achieved a remarkable compound annual growth rate (CAGR) exceeding 30%, crossing the Rs 15,000-crore Assets Under Management (AUM) milestone. The company is actively expanding by adding 30–40 branches annually, including entering new markets like Uttar Pradesh, while aiming for a sustained 25% medium-term AUM growth. Low-Risk Portfolio Mix: To minimize credit risk, the company focuses heavily on a granular, urban loan book where 83% are secured home loans and 68% of the customer base consists of salaried individuals. The average loan ticket size remains stable at a modest Rs 12 lakh. Strong Financial Performance: Driven by robust growth and lowered funding costs, Home First saw its Return on Assets (RoA) improve by 40 basis points in FY26, keeping it steady around 4%. Additionally, its Net Interest Margin (NIM) improved by 50 basis points year-over-year to 5.7%. Tech & Co-Lending Drivers: Technology adoption continues to enhance operational productivity, while expanding co-lending partnerships—which doubled in FY26—are fueling incremental growth in higher-ticket loans to diversify their customer base