Motilal Oswal:Buy Home First Finance; target of Rs 900

Motilal Oswal is bullish on Home First Finance recommended buy rating on the stock with a target price of Rs 900 in its research report dated May 04, 2023.

HomeFirst’s 4QFY23 PAT grew 6% YoY/9% QoQ to INR640m. Adjusted PAT (after excluding the benefit of tax rate change in 4QFY22) grew 33% YOY. FY23 PAT rose 21% YoY to ~INR2.9b (PY: ~INR1.9b in FY22). Annualized credit costs stood at 48bp (PQ: 44bp). NII grew 31% YoY to INR1.12b. Non-interest income grew 55% YoY, driven primarily by higher assignment income and advertisement income. 4QFY23 opex grew 30% YoY, led by investments in new branches and resultant higher employee expenses. PPoP grew 38% YoY to INR910m. HomeFirst has been opening new branches and expanding its distribution network in Tier 2/3 cities. It has also been investing in technology and analytics to improve its underwriting and credit assessment capabilities, which will help it target right customers in these markets. A strong and steady execution positions the company well to capture the significant opportunity in the affordable housing segment.


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