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has buy call on Home First Finance Company with a target price of Rs 625. The current market price of Home First Finance Company India Ltd. is Rs 525.6.
Home First Finance Company India Ltd., incorporated in the year 2010, is a Small Cap company (having a market cap of Rs 4596.55 Crore) operating in General sector.
Financials
For the quarter ended 31-03-2021, the company reported a Standalone Total Income of Rs 135.53 Crore, up 22.69 % from last quarter Total Income of Rs 110.46 Crore and up 28.11 % from last year same quarter Total Income of Rs 105.79 Crore. Company reported net profit after tax of Rs 31.28 Crore in latest quarter.
Investment Rationale
HomeFirst exited FY21 on expected lines with: 1) stage-3 assets at 1.8%, credit cost at 100bps, 1+ dpd pool at 6.2%, and zero restructuring; 2) disbursements regaining traction in Q4FY21 or H2FY21 (to be precise) supported AUM growth of 14% YoY / 5% QoQ; 3) after a pause, securitisation of Rs1.2bn of asset pool yielded income of Rs181mn (securitisation income in FY21 being at par with FY20 at 1.1% of assets); 4) Portfolio spreads drawing support of lower borrowing cost (down to 7.4% in Q4FY21) settled >5%. With >30% AUM growth, funding cost benefit, improved cost to income ratio, and contained credit cost, it expects earnings to compound at ~40% over FY21-FY23E. However due to excessive capitalisation (tier-1 at 55%) and despite >3% RoAs, RoEs will be modest at ~12%. It maintains BUY. Key risks: i) sourcing as well as collections managed by front-end team; ii) apartment home loans showing some stress (in pockets).
Promoter/FII Holdings
Promoters held 33.7 per cent stake in the company as of March 30, 2021, while FIIs held 11.8 per cent, DIIs 41.7 per cent and public and others 12.8 per cent.
Home First Finance Company India Ltd., incorporated in the year 2010, is a Small Cap company (having a market cap of Rs 4596.55 Crore) operating in General sector.
Financials
For the quarter ended 31-03-2021, the company reported a Standalone Total Income of Rs 135.53 Crore, up 22.69 % from last quarter Total Income of Rs 110.46 Crore and up 28.11 % from last year same quarter Total Income of Rs 105.79 Crore. Company reported net profit after tax of Rs 31.28 Crore in latest quarter.
Investment Rationale
HomeFirst exited FY21 on expected lines with: 1) stage-3 assets at 1.8%, credit cost at 100bps, 1+ dpd pool at 6.2%, and zero restructuring; 2) disbursements regaining traction in Q4FY21 or H2FY21 (to be precise) supported AUM growth of 14% YoY / 5% QoQ; 3) after a pause, securitisation of Rs1.2bn of asset pool yielded income of Rs181mn (securitisation income in FY21 being at par with FY20 at 1.1% of assets); 4) Portfolio spreads drawing support of lower borrowing cost (down to 7.4% in Q4FY21) settled >5%. With >30% AUM growth, funding cost benefit, improved cost to income ratio, and contained credit cost, it expects earnings to compound at ~40% over FY21-FY23E. However due to excessive capitalisation (tier-1 at 55%) and despite >3% RoAs, RoEs will be modest at ~12%. It maintains BUY. Key risks: i) sourcing as well as collections managed by front-end team; ii) apartment home loans showing some stress (in pockets).
Promoter/FII Holdings
Promoters held 33.7 per cent stake in the company as of March 30, 2021, while FIIs held 11.8 per cent, DIIs 41.7 per cent and public and others 12.8 per cent.
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