HFFC observed no major disruption in pricing and demand while recognising that looming clouds on IT services-related jobs have been partially offset by rising employment in GCC
Target: ₹1,500
CMP: ₹1,093.40
We hosted Home First Finance Company (HFFC) where we interacted with the top management which indicated that it’s premature to conclude the impact and the direction of IRDAI’s draft circular. Any major disruption or reduction in the issuance of insurance policies to the customers may possibly nudge credit costs higher, while there are alternate options to secure the property via mortgage guarantee and the likes.
HFFC observed no major disruption in pricing and demand while recognising that looming clouds on IT services-related jobs have been partially offset by rising employment in GCCs. Its management highlighted that top-6 cities accounted for a low double-digit proportion of AUM with ample untapped potential, subject to sharp loan ticket size expansion on account of bigger homes.
Spread is reiterated at 5-5.25 per cent despite the likelihood of a policy rate hike, given the fully floating loan book which allows a relatively quicker transmission of the higher cost of funds. Furthermore, despite enjoying high branch productivity vs. most peers, HFFC gave guidance of a further scope to improve branch productivity from current levels. We expect its RoE to be about 16 per cent in FY28F and believe that its valuation remains attractive due to calibrated growth and proven track record.
We maintain our high-conviction Add rating on HFFC with a stable target price of ₹1,500, valuing it at 2.9x FY28F BV and 19x FY28F EPS.
Published on September 29, 2026
