ICICI Securities Upgrades First Finance Company to 'Buy', Targets Rs 1450

ICICI Securities Maintains BUY Rating for Home First Finance Company

Home First Finance (HomeFirst), a leading player in the non-banking finance sector, has demonstrated a significant improvement in its disbursement performance in the fourth quarter of FY26. The company's disbursements reached INR 15.7 billion, marking a 19% quarter-on-quarter increase and breaking the multi-quarter average range of INR 11-13 billion. This notable performance lends credence to two critical aspects: HomeFirst's potentially strong medium-term growth trajectory and the transient nature of the challenges witnessed in H1FY26.

In addition to the strong disbursement numbers, HomeFirst has also shown improvement in its underlying asset quality trends. The company's 1+ Days Past Due (DPD) has declined sequentially for the second consecutive quarter, reaching 4.7% in Q4FY26, down from its peak of 5.5% in Q2FY26. This decline suggests that the company is making progress in managing its asset quality.

Management's Outlook

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The management of HomeFirst sounds confident of sustaining a growth rate of approximately 25% in Assets Under Management (AUM) in FY27. This growth is expected to drive the company's medium-term growth trajectory and further strengthen its position in the non-banking finance sector.

Recommendation

Based on the company's strong disbursement performance and improved asset quality trends, ICICI Securities maintains a BUY rating for HomeFirst with an unchanged target price of INR 1,450. The target price is based on a valuation multiple of 3 times the estimated Book Value Per Share (BVPS) for March 2027.

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