Buy Home First Finance, target price Rs 1,250: Motilal Oswal Financial Services

Motilal Oswal Financial Services has a buy call on Home First Finance Company India. with a target price of Rs 1250. The current market price of Home First Finance is Rs 1029.35. Home First, incorporated in 2010, is a Small Cap company with a market cap of Rs 9183.75 crore, operating in the NBFC sector.

Home First Finance Company India Ltd. key Products/Revenue Segments include Interest, Income From Financial Services, Income From Sale Of Share & Securities, Fees & Commission Income and Other Operating Revenue for the year ending 31-Mar-2024.



Financials
For the quarter ended 30-09-2024, the company has reported a Standalone Total Income of Rs 374.24 crore, up 9.64% from last quarter Total Income of Rs 341.32 crore and up 34.63% from last year same quarter Total Income of Rs 277.98 crore. The company has reported a net profit after tax of Rs 92.22 crore in latest quarter.

The company?s top management includes Mr.Deepak Satwalekar, Mr.Manoj Viswanathan, Ms.Sucharita Mukherjee, Mr.Narendra Ostawal, Ms.Geeta Dutta Goel, Mr.Anuj Srivastava, Ms.Divya Sehgal, Mr.Maninder Singh Juneja. Company has Deloitte Haskins & Sells as its auditors. As on 30-09-2024, the company has a total of 9 crore shares outstanding.

Investment Rationale
Home First's strategic positioning, coupled with its focus on cost efficiencies and robust capital management, supports a strong loan growth trajectory. Given the company's strong fundamentals, steady RoE improvement, and stronger loan growth (relative to its peers), Home First remains an attractive investment opportunity in the affordable housing finance segment. Fom a technical perspective, Home First now has a free-float market capitalization of ~74%. Private Equity (PE) investor exits in Home First have been among the most well-managed, wherein these investors have guided the markets well, instead of keeping investors guessing about the potential supply. Motilal Oswal Financial Services believes that the current valuation of 2.6x FY27E P/BV is reasonable for a franchise that is very well governed, has a healthy AUM growth trajectory, and best-in-class asset quality. They have reiterates a BUY rating with a target price of Rs 1,250 (premised on 3.5x Sep?26E BVPS).

Promoter/FII Holdings
Promoters held 23.38 per cent stake in the company as of 30-Sep-2024, while FIIs owned 25.56 per cent, DIIs 12.41 per cent.