Home First Finance Q1 FY27 Investor Presentation: AUM Grows 25.7% as Profit Rises 34.5% on Strong Housing Loan Demand

What Happened ?

key details

Strong AUM Growth Driven by Record Disbursements:

Key Points

• Assets Under Management (AUM) increased to ₹16,938 crore, registering 25.7% YoY growth.
• Quarterly disbursements reached a record ₹1,628 crore, growing 31.0% YoY.
• Growth was broad-based across geographies and distribution channels.
• The company continued expanding its presence in the affordable housing finance market while maintaining portfolio quality.
• Management reiterated its target of delivering approximately 25% AUM growth for FY27. 

Note:

• Record loan disbursements and consistent customer demand continued to drive Home First’s industry-leading AUM growth.

Profitability Remains Strong:

Key Points

• Profit After Tax (PAT) rose 34.5% YoY to ₹160 crore.
• Net Total Income increased 29.9% YoY to ₹332 crore.
• Return on Assets (ROA) remained healthy at 4.2%.
• Return on Equity (ROE) stood at 14.5%.
• Spread (excluding co-lending) remained stable at 5.3%, reflecting disciplined pricing and liability management.
• Operating Expense to Assets was maintained at 2.8%, demonstrating continued operating efficiency. 

Note:

• Stable spreads, improving operating leverage and controlled costs supported another quarter of strong earnings growth.

Asset Quality Continues to Remain Stable:

Key Points

• Gross Stage 3 assets remained at 1.8%.
• 30+ Days Past Due (DPD) stood at 3.2%.
• 1+ DPD was 4.7%, indicating healthy collection efficiency.
• Credit cost remained well contained at 40 basis points.
• Stable asset quality was supported by disciplined underwriting, centralized credit evaluation and strong collection capabilities.
• Management highlighted that portfolio quality remained resilient despite rapid business expansion. 

Note:

• Home First continues to balance rapid loan growth with prudent risk management and stable credit performance.

Distribution Network Expansion:

Key Points

• Four new branches were opened during Q1 FY27.
• Total branch network expanded to 175 branches.
• The company now operates 373 customer touchpoints across 145 districts in 13 States and Union Territories.
• Home First continues following a hub-and-spoke expansion strategy focused on affordable housing markets.
• Geographic expansion remains concentrated in high-growth housing finance regions. 

Note:

• Continued branch expansion strengthens customer acquisition while improving service accessibility across underserved markets.

Technology-Led Affordable Housing Franchise:

Key Points

• Home First continues operating as a technology-driven affordable housing finance company.
• Approximately 85% of loan approvals are completed within 48 hours.
• The company serves over 1.45 lakh customers nationwide.
• Proprietary underwriting models integrate digital data sources and Account Aggregator infrastructure.
• Digital processes help improve approval speed, operational efficiency and customer experience.
• The company maintains relationships with 32 lending institutions, supporting a diversified funding base. 

Note:

• Technology-enabled underwriting remains a key competitive advantage in serving first-time home buyers and self-employed borrowers.

ESG and Green Housing Initiatives:

Key Points

• Home First certified an additional 100 Green Homes during Q1 FY27.
• Total certified Green Homes reached 550 by June 2026.
• The company recorded an ESG Risk Score of 13.6, categorized as Low Risk by Morningstar Sustainalytics.
• It also achieved an S&P Global ESG Score of 46.
• Management continues integrating sustainability into its affordable housing business model through environmentally responsible housing initiatives.

Note:

• Although still modest in scale, the Green Homes programme demonstrates the company’s long-term commitment to sustainable housing finance.

Management Outlook:

Key Points:

• Management expects structural demand for affordable housing to remain strong.
• Growth will continue to be supported by:
  • Rising urbanisation.
  • Increasing formalisation of household incomes.
  • Favourable demographics.
  • Continued government policy support for housing.
• The company remains confident of achieving approximately 25% AUM growth while maintaining profitability, portfolio quality and operational efficiency.
• A strong capital position, diversified funding profile and scalable operating platform are expected to support long-term growth. 

Risk Analysis

Summary:

• Home First Finance delivered another strong quarter with healthy growth in AUM, record disbursements and improving profitability while maintaining stable asset quality. Nevertheless, as an affordable housing finance company, it remains exposed to interest rate movements, funding availability, asset quality deterioration, competitive pressures and macroeconomic conditions affecting borrowers. Continued execution of its expansion strategy while preserving margins and credit quality will be critical for sustaining long-term growth. 

Key Risks:

• Interest Rate Risk: Changes in borrowing costs or policy rates could impact lending spreads and net interest margins if funding costs rise faster than loan yields.
• Asset Quality Risk: Although Gross Stage 3 assets remain low at 1.8%, deterioration in borrower repayment capacity due to economic stress could increase delinquencies and credit costs.
• Funding Risk: Continued business expansion depends on maintaining access to diversified and competitively priced funding from banks and financial institutions.
• Execution Risk: Rapid branch expansion, employee additions and geographical growth require consistent operational execution to maintain productivity and service quality.
• Competitive Risk: Increasing competition from banks, housing finance companies and fintech lenders could pressure pricing, customer acquisition costs and market share.
• Macroeconomic Risk: Slower economic growth, weaker employment conditions or lower disposable incomes could reduce demand for affordable housing loans.
• Regulatory Risk: Changes in RBI regulations, housing finance norms or affordable housing policies may affect lending operations and profitability.

Worst Case:

• A prolonged economic slowdown combined with higher funding costs and weakening borrower repayment capacity could slow AUM growth, increase non-performing assets and compress profitability. Intense competition or regulatory changes could further pressure margins and reduce future growth momentum.

Risk Level: Medium

Company Commentary

• Home First reported 25.7% YoY growth in Assets Under Management, reaching ₹16,938 crore.
• Quarterly disbursements reached a record ₹1,628 crore, reflecting strong demand across its target customer segments.
• Profit After Tax increased 34.5% YoY to ₹160 crore, supported by higher income, stable spreads and operating leverage.
• Asset quality remained stable with Gross Stage 3 assets at 1.8%, 30+ DPD at 3.2% and credit cost of 40 basis points.
• During the quarter, the company expanded its network to 175 branches and 373 touchpoints, while adding 133 employees, primarily in customer-facing roles.
• Management remains confident of delivering around 25% AUM growth during FY27 while maintaining profitability, portfolio quality and operating efficiency, supported by favourable industry fundamentals and a strong capital and funding position.