Khambatta Securities has given Buy recommendation for Home First Finance Company India with a target price of Rs. 988 in its research report issued on Feb 01, 2022
Khambatta Securities’ research report on Home First Finance Company India
Home First Finance Company India Limited (HFFC) is a technology-driven affordable housing finance company that targets first-time home buyers in the low and middle-income groups. India has a huge housing shortage and a lower percentage of home ownership than even many developing countries. The extremely low mortgage penetration levels in India compared to other countries presents a tremendous potential for growth of housing finance. With its focus on affordable housing finance, HFFC is well-positioned to benefit from the growing demand in the segment, driven by favourable policy initiatives. Through its focus on technology, HFFC has built a scalable operating model, which enables expansion of operations and drive revenue growth with lower incremental costs. The digital service delivery mechanisms and operating model bring uniformity in operations, increases customer satisfaction and aids in expansion across high-growth geographies.
We expect strong growth in earnings and ROE, driven by healthy expansion in HFFC’s loan book without compromising on asset quality. We initiate coverage on HFFC with a BUY based on a price target of ₹ 988 at a P/B ratio of 4.3x FY24E BVPS, informing an upside potential of 31% from current levels.