Home First Finan Q1 FY27 Earnings Call — Analysis (NSE: HOMEFIRST)
Home First Finance Q1FY27: AUM up 25.7% YoY, PAT up 34.5% YoY, stable asset quality, and CFO Nutan Patwari to step down effective Aug-2026
The take
Q1FY27 Cost-to-income 32.7% ( +70 bps QoQ ) . New guidance — FY27 aum growth 25% . New story: Technology/AI as key differentiator .
Results
AUM ₹16,938 Cr +25.7% YoY; disbursements ₹1,628 Cr +31% YoY; PAT ₹160 Cr +34.5% YoY; ROA 4.2%, ROE 14.5%; 30+ DPD flat at 3.2%, GNPA flat at 1.8%
Financial highlights
| Metric | Value | Change | Basis |
|---|---|---|---|
| AUM | ₹16,938 Cr | +25.7% | yoy · Q1FY27 · Jun-26 |
| Disbursements | ₹1,628 Cr | +31.0% | yoy · Q1FY27 |
| PAT | ₹160 Cr | +34.5% | yoy · Q1FY27 |
| ROA | 4.2% | +10 bps | qoq · Q1FY27 |
| ROE | 14.5% | +50 bps | qoq · Q1FY27 |
| Spread ex co-lending | 5.3% | point_in_time · Q1FY27 · Q1FY27 | |
| NIM | 6.0% | +10 bps | qoq · Q1FY27 |
| Cost-to-income | 32.7% | +70 bps | qoq · Q1FY27 |
| GNPA | 1.8% | qoq · Q1FY27 | |
| Capital adequacy ratio | 42.6% | point_in_time · Q1FY27 · Jun-26 |
Guidance
FY27 AUM growth ~25% reiterated; full-year Opex-to-assets guided at 2.6-2.7%; spreads maintained at 5-5.25%
What management committed to
- [Home First] is confident of delivering 25% AUM growth while maintaining focus on profitability, portfolio quality and operating efficiency. — 25%, FY27
- [Home First] is committed to maintaining [the] ex-col lending spread at 5% to 5.25%. — 5% to 5.25%
- [Home First] expects full-year FY27 Opex-to-assets ratio to broadly remain range-bound within 2.6% to 2.7%. — 2.6% to 2.7%, FY27
- BT out rate should be controlled in the 5% to 6% range going forward. — 5% to 6%, FY27
Key themes
Affordable housing growth with tech-led efficiency
How the narrative shifted
- Affordable housing demand remains compelling: Management sees sustained demand in affordable housing, buoyed by a large underserved population and rising incomes.
- Technology/AI as key differentiator: Home First positions its digital DNA and AI deployments (Cue platform, bureau analyzer) as central to underwriting accuracy, cost efficiency, and scalable growth.
- Stable asset quality with granular secured book: Asset quality remained stable across DPD buckets; individual housing loans form 83% of portfolio, and management overlays provide prudent balance sheet protection.
- CFO transition and succession planning: The long-serving CFO will step down; the Board is evaluating candidates, and the outgoing CFO is credited with strengthening financial architecture and governance.
- BT out containment via internal processes: A structured retention protocol (branch manager outreach, top-up offers) has brought BT out rate below 5%, demonstrating improving portfolio stickiness.
- Geographic expansion towards UP and southern states: Management identifies Uttar Pradesh and the southern corridor (Tamil Nadu, Andhra, Telangana) as medium-term growth drivers, with a strengthened team in Tamil Nadu.
Operational commentary
- Added 4 branches (Gujarat, Andhra Pradesh, Tamil Nadu, Madhya Pradesh), network now 175 branches and 373 touch points; net addition of 133 employees to 1,988 headcount.
- Launched in-house AI platform 'Cue' for omnichannel customer communication; deployed bureau analyzer and bank statement analysis models in production; AI-led pilots underway in lead qualification, legal/technical valuation, and income analysis.
- BT out rate dropped to 4.5% from ~5-6% range, driven by internal retention protocols including branch manager outbound and top-up pitches.
- CFO Nutan Patwari to step down from executive responsibilities effective August 31, 2026; Board evaluating candidates for successor.
- Co-lending disbursements subdued at ₹46 Cr due to process/policy changes; partner alignment underway, scaling expected to stabilize.
- Stressed pockets (Surat, Tirupur) improving post-tariff resolution; no fresh war-related stress observed.
- Geographic focus: Maharashtra, Gujarat, Madhya Pradesh lead; Tamil Nadu team strengthened; Uttar Pradesh and southern states identified for medium-term growth acceleration.
Analyst Q&A
Q. Is the 31% YoY disbursement growth driven more by home loans or LAP, and what about ticket size shift?
Home loan originations led; LAP is not a strong focus. Ticket size increase is gradual and mostly in home loans. ~50% of growth from units, 50% from ticket size.
Q. How sustainable is the 7.6% incremental cost of borrowing and the 5.2% incremental spread?
No one-off; NHB drawdown not taken in Q1. Market has moved favorably. Book spread long-term guidance is 5-5.25%, so current incremental 5.4% is above that. The word 'sustainable' is unfair given the guidance range.
Q. What is the full-year Opex-to-AUM guidance, given limited YoY improvement?
Full year FY27 Opex-to-assets expected at 2.6-2.7%, with 5-10 bps annual reduction.
Q. With CIBIL scores rising and NTC shrinking, how do you avoid being easy BT out targets for lower-cost lenders?
We mine data to maintain spreads while improving credit profiles. Higher ticket size customers face documentation gaps that banks won't process; we provide seamless service.
Q. What drove the exit from one district in Tamil Nadu, and how will servicing be managed?
Servicing can be handled from a nearby branch. We monitor early portfolio trends and may pause origination if the first 100 loans show adverse trends.
Research and educational content only. Not investment advice.