Ventura Securities has initiated coverage on Home First Finance Company with a “BUY” rating and a target price of INR 1,935, implying a potential upside of 48.7% from the current market price of INR 1,301. The brokerage’s conviction is based on the lender’s strong growth in affordable housing finance, industry tailwinds and ability to leverage technology for scale.
Home First Finance Growth Outlook
Home First Finance has delivered a 33% CAGR in assets under management (AUM) between FY22–FY25, driven by government backed housing demand and rapid branch expansion. Going forward, Ventura expects AUM to grow from INR 12,713 crore in FY25 to INR 25,037 crore by FY28, at a CAGR of 25.3%. Housing loans will be the core growth driver (82% by FY28), with loans against property growing faster (29.3% CAGR).
A recent INR 1,250 crore QIP in April 2025 has strengthened HFFC’s balance sheet, reducing its dependence on borrowings and setting the stage for margin expansion. Ventura expects NIMs to rise to 5.7% by FY28 and net profit to more than double to INR 779 crore over the same period.
Industry Tailwinds
India’s INR 33 lakh crore housing finance market, which is about 14% of systemic credit, is expected to grow at 15–16% CAGR through FY30, with affordable housing finance companies (AHFCs) accounting for nearly one-third of the market. Mortgage penetration in India is only 12% of GDP, well below developed market averages of 20%+, leaving a lot of room for growth.
HFFC’s focus on first time homebuyers in Tier-II and Tier-III cities is perfectly in line with government initiatives like Pradhan Mantri Awas Yojana (PMAY) which provides subsidies for low and middle income groups.
Tech Edge and Fastest Turnaround
HFFC has created a technology-first lending model. With a fully digital loan origination and management system, the company has brought down approval time to 48 hours compared to 2 weeks of its peers. The system uses AI/ML for credit underwriting and risk monitoring to increase efficiency and customer experience.
It has omni-channel presence of 361 touchpoints across 142 districts, including physical branches and digital connectors. By FY28, the branch count is expected to reach 268 and disbursements to grow at 21.1% CAGR.
Financials and Estimates
Ventura expects Net Interest Income (NII) to grow at 27% CAGR to INR 1,298 crore by FY28. PPOP margins to expand by 438 bps and cost-to-income to come down to 31.3%. GNPA is expected to rise to 1.9% by FY28 but asset quality will be resilient.
Key ratios projected for FY28:
- RoAA: 3.6%
- RoAE: 15%
- Capital Adequacy: ~32%
- P/E: 17x
- P/BV: 2.4x
Valuation: Bull, Base, and Bear Scenarios
- Bull Case: INR 2,215 (70% upside, 4.4x FY28E adjusted book value)
- Base Case (Target): INR 1,935 (49% upside, 3.8x)
- Bear Case: INR 1,655 (27% upside, 3.3x)
Even under conservative assumptions, Ventura sees meaningful upside, underscoring HFFC’s potential as a compounder in affordable housing finance.
Home First Finance Post-IPO Performance
HFCC launched its IPO in January 2021 with an issue size of approximately INR 1,153.72 crore. The offering was oversubscribed 26.65 times and debuted with modest listing gains of 1.84%. However, from a long-term perspective, the stock has maintained a consistent upward growth trajectory since its listing. In July, it touched an all-time high of INR 1,473.90, delivering nearly 3x returns compared to its issue price of INR 518. Currently, the stock is undergoing a correction phase and is trading around INR 1,290, which represents a 12% decline from its all-time high.
Risks to Watch
The brokerage cautions that Home First Finance Company’s fully floating-rate loan book exposes it to interest rate risks. Falling rates could pressure yields, while any deterioration in asset quality from rising delinquencies may dent margins. Elevated EMI-to-income ratios also remain a risk in a high-rate environment.
The Bottom Line
Ventura’s bullish stance on Home First Finance reflects a convergence of strong industry tailwinds, a scalable tech-enabled model, robust balance sheet, and consistent profitability. With India’s affordable housing finance sector set for accelerated growth, HFFC is seen as a key beneficiary — and Ventura expects investors could unlock nearly 49% gains in the next 24 months.
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