Prabhudas Lilladher Maintains 'Hold' Rating on Home First Finance Company India, Price Target Set at Rs 1,350

Home First Finance Company India Sees Strong Growth in Q4

In its latest research report, Prabhudas Lilladher has highlighted the strong growth of Home First Finance Company India in the fourth quarter of the fiscal year. The company's disbursements and assets under management (AUM) saw a significant increase of 24% and 25% year-over-year (YoY) respectively.

The research report also guided for a 25% growth in AUM for fiscal year 2027, driven by the recovery in the Tamil Nadu (TN) and Karnataka (KN) markets, as well as deeper penetration across both new and existing markets. However, the report also built in a 24% growth amid rising competitive intensity.

In terms of spreads, the report expects a slight moderation in fiscal year 2027 and 2028 estimates as the portfolio reprices, with hardening bond yields likely to exert some pressure. Additionally, the report expects an improvement in operating expenses (opex) to flow-through as productivity benefits materialize.

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The research report also highlighted that credit cost is likely to be benign, with an improvement to 33/32 basis points (bps) in fiscal year 2027 and 2028 estimates (vs. 40 bps in fiscal year 2026).

Outlook

Prabhudas Lilladher has increased its estimates for fiscal year 2027 and 2028, factoring in stable net interest margin (NIM) and opex. The research firm has also tweaked its multiple slightly to 2.5x (earlier 2.4x) with a target price (TP) of INR 1,350.

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The research firm has downgraded its recommendation to ACCUMULATE, as the stock has run up by 21% in the past month.