Home First Finance Company India Ltd., incorporated in the year 2010, is a Small Cap company (having a market cap of Rs 4050.81 Crore) operating in General sector.
Financials
For the quarter ended 31-12-2020, the company reported a Standalone Total Income of Rs 110.46 Crore, up .74 % from last quarter Total Income of Rs 109.65 Crore and down -8.51 % from last year same quarter Total Income of Rs 120.73 Crore. Company reported net profit after tax of Rs 15.91 Crore in latest quarter.
Investment Rationale
Home First Finance (HomeFirst), an affordable housing financier (AHF) with AUM of Rs39bn and focus on salaried housing loans, has several value propositions that differentiate it from peers in high growth, high yielding, hugely untapped AHF segment: i) 75% customers in EWS/LIC category and 32% being new to credit; ii) technology at its core – right from sourcing to collections; iii) well-trained/educated team to appropriately assess need and right size loans; iv) paperless loan processing with quick TAT of 30% AUM growth, funding cost benefit, improved cost to income and contained credit cost, we expect earnings to compound at >40% over FY21-23E. However due to excessive capitalisation (Tier-1 at 51%), despite 3% plus RoAs, RoEs will be modest at ~12%. Using Gordan Growth model, the brokerage arrives at target price of Rs625– an upside of >30% from CMP.
Promoter/FII Holdings
Promoters held 33.7 per cent stake in the company as of March 31, 2021, while FIIs held 10.9 per cent, DIIs 41.7 per cent and public and others 13.8 per cent.
