HOMEFIRST - Home First Finance Company India Limited Share Price

Management provided an optimistic outlook for Home First Finance Company India, targeting a 25% growth in Assets Under Management (AUM) for FY27. Key forward-looking points from the management include:

1. Growth Projections: The company is set to achieve approximately Rs. 19,600 to Rs. 19,700 crores in AUM by March 2027, with a confidence to sustain 25% growth driven by enhanced distribution and technology adoption.

2. Branch Expansion: Management plans to add 6-8 branches in Q4 FY26 and 25-30 branches in FY27, focusing on states like Madhya Pradesh, Tamil Nadu, and Maharashtra.

3. Disbursement Goals: Q3 FY26 recorded disbursements of Rs. 1,318 crores, marking an all-time high. Monthly disbursements surpassed Rs. 500 crores for the first time in December 2025, with plans to maintain momentum through FY27.

4. Asset Quality Improvement: The company reported a 1+ Day Past Due (DPD) of 5.3%, with expectations of continued improvement. Stable collection efficiency and management's focus on early delinquencies are expected to enhance asset quality further.

5. Technological Initiatives: The firm emphasizes technology-driven operational efficiencies, reporting that 81% of approvals in Q3 were via the account aggregator framework and over 80% of loans were digitally fulfilled.

6. Market Dynamics: Noteworthy improvements were noted in states like Gujarat, with management indicating that tariff impacts have stabilized, alongside an optimistic outlook for states like Tamil Nadu and Uttar Pradesh where strategic focus is being placed.

7. Continued Demand: The management believes the increasing income levels in India will support the growth in the affordable housing segment, thus sustaining demand for home loans.

8. Green Home Initiative: The company is promoting sustainable housing, having certified 310 green homes under its initiative.

Overall, the management's insights project strong recovery momentum alongside strategic initiatives designed to expand reach and enhance operational robustness.

Here are the major questions and their respective answers from the Q&A section of the earnings transcript:

1. Question: What is leading to the sequential improvement in disbursements, and what internal targets are set for Q4 given the guidance of 25% AUM growth? Answer: Our target is to achieve 25% AUM growth. Disbursements have improved due to renewed confidence from stabilizing asset quality issues and resolution of previous year's concerns. The growth is reinforced by increased origination numbers. We believe Q4 will show strong results, supporting our guidance.

2. Question: Can you clarify the bounce rates and their connection to collection efficiencies? Answer: The bounce rates are influenced more by behavioral issues, as customers sometimes miss a payment in one account while paying off others. We're seeing a disconnect between rising bounce rates and improving collection efficiencies, indicating better overall collection performance even with some bounce incidents.

3. Question: What's your perspective on Tamil Nadu's productivity and competitive intensity affecting recovery? Answer: We anticipate recovery in Tamil Nadu will stabilize over the next two quarters. The revitalization of our team should contribute positively, and we will focus on higher-value segments to boost productivity in this key market.

4. Question: Can you share how the recent PLR cut impacts future rates, considering competitive intensity? Answer: The recent 10 bps PLR cut aligns with our borrowing costs. Future reductions will depend on market conditions and are meant to maintain fairness with our clients rather than solely react to BT-out rates, which we expect to manage effectively without drastic changes.

5. Question: Regarding asset quality, do you foresee improvement in Stage 3 assets as collection efforts continue? Answer: We anticipate Stage 3 will start to improve this quarter due to better collection efficiencies compared to last year. Early delinquency reductions are encouraging, indicating a trend toward stabilization in asset quality.

6. Question: What are your disbursement targets for FY27 given the current growth trajectory? Answer: While we're not providing specific disbursement numbers, we do aim for 25% AUM growth, which is our primary guidance. Flexibility in our budgeting allows us to adapt to various market conditions.

7. Question: How does the company view competition impacting PN rates in the affordable housing segment? Answer: We acknowledge that BT-out practices have intensified, but our focus remains on retention strategies to combat this while maintaining competitive rates without jeopardizing long-term sustainability.

8. Question: Can you summarize the breakdown of your loan book by asset class? Answer: In terms of AUM, apartments constitute approximately 16%, while self-construction loans are around 26%, showing our diverse engagement within housing products.

9. Question: Considering challenges in Tamil Nadu, how do you plan to overcome these difficulties in collections and disbursements? Answer: We've stabilized our team and expect recovery through targeted efforts and focused engagement in that market. Continued enhancement of product offerings will also contribute to our objectives.

10. Question: Could you discuss the customer profile contributing to recent GNPA increases? Answer: A significant portion of recent defaults stems from unforeseen circumstances, such as health issues or job loss leading to liquidity crises. Addressing these issues requires a robust support system for our borrowers amid challenging times.

These summaries encapsulate the core of the questions and answers within the specified character limit.