Motilal Oswal has given Buy recommendation for Home First Finance Company recommended buy rating on the stock with a target price of Rs 1025 in its research re with a target price of Rs. 1025 in its research report issued on Oct 20, 2022
Motilal Oswal’s research report on Home First Finance Company
HomeFirst’s 2QFY23 PAT grew 21% YoY/6% QoQ to INR543m (in-line). Credit costs grew 37% QoQ to INR50m (MOFSLe: INR31m). Underlying this, the NII grew 58% YoY to ~INR1b (in-line). ‘Other income’ grew 13% QoQ, driven primarily by higher treasury gains and investment income. Opex was 7% higher than estimated and grew 47% YoY and 14% QoQ, led by investments in new branches and resultant higher employee expenses. Disbursements grew 36% YoY to ~INR7b, leading to AUM growth of 36% YoY to ~INR62.8b. AUM growth was marginally impacted by subsidy received by the company under the PMAY scheme.
Outlook
We estimate the company to deliver RoA/RoE of 3.9%/16% by FY25 and reiterate our Buy rating with an unchanged TP of INR1,025 (based on 4.0x Sep’24E BVPS).