ICICI Securities has maintained a BUY call on Home First Finance Company, with a target price of Rs 1,450 versus a current market price of Rs 1,215, implying upside of about 19%. The brokerage’s thesis rests on a sharp Q4FY26 rebound in disbursements, a return to healthy AUM growth, and improving early delinquency indicators, even as it keeps an eye on asset-quality risks in LAP.

Strong quarter, clearer signal

Home First Finance ended FY26 on a far firmer footing than the mid-year wobble had suggested. The company delivered record quarterly disbursements of Rs 15.7bn, up 19% QoQ and 24% YoY, while AUM crossed the Rs 150bn milestone at Rs 158.8bn, rising 6% QoQ and 25% YoY. ICICI Securities argues that this performance reinforces the case for a strong medium-term growth trajectory and suggests the weakness seen in H1FY26 was temporary rather than structural.

Growth engine re-ignites

The most important takeaway from the quarter is momentum. Management is guiding for about 25% AUM growth in FY27, supported by 30–40 branch additions annually, deeper penetration in existing cities, and an expanded presence in newer growth markets. The brokerage expects the housing-loan and LAP mix to remain broadly stable at around 80:20, while co-lending continues to widen reach and serve larger-ticket customers.
What stands out most is the turnaround in Mumbai and Pune, where developer-led sourcing is now scaling meaningfully after an 18–24 month transition. ICICI Securities says this, along with improving traction in Tamil Nadu, Telangana, and the expected ramp-up in Uttar Pradesh, could help Home First sustain its growth momentum into FY27 and FY28.

Margins hold steady

Profitability remained sturdy despite a small sequential dip in NIM. Q4FY26 PAT rose to Rs 1.5bn, up 7% QoQ and 43% YoY, translating into RoA of 4.1% and RoE of 14%. Spreads were 5.2%, flat sequentially, as a 20bps decline in portfolio yield was offset by a 20bps fall in borrowing cost.

Management expects spreads to remain in the 500–520bps range, while the company’s 100% floating-rate asset book gives it flexibility to reprice if funding costs move. Borrowing costs in Q1FY27 are expected to stay near Q4 levels, and no further PLR cuts are anticipated at present.

Asset quality improves

The cleanest part of the quarter was the improvement in early delinquency metrics. 1+ DPD dropped to 4.7%, down 60bps QoQ, while 30+ DPD improved to 3.2%; gross stage-3 eased to 1.8% and net stage-3 to 1.4%. Bounce rates also softened to 15.9%, though April 2026 was slightly higher at 16.3%.

ICICI Securities sees this as an encouraging lead indicator for FY27, especially because April collections were better than in April 2024 and April 2025, and fresh slippages are tracking below prior-year levels. Credit cost held at 40bps in Q4FY26, and the company retains guidance of 30–40bps for FY27.

Capital and costs

Home First’s capital base looks unusually comfortable after the Rs 12.5bn QIP completed in April 2026. CRAR rose to 44.1%, with Tier-1 capital at 43.8%, giving the company substantial firepower for growth. The balance sheet showed borrowings of Rs 107.2bn and loans of Rs 131.3bn at quarter-end, alongside a materially stronger net worth.

Operating efficiency also remains in good shape. Opex-to-assets stayed at 2.7%, and management expects this ratio to remain in a 260–270bps band as it continues investing in distribution, talent, and technology. The company added 221 employees in FY26 and ended with 171 branches and 373 touchpoints.

Levels for investors

For investors looking at the stock through a valuation lens, the important markers are clear. ICICI Securities pegs the target price at Rs 1,450, versus CMP Rs 1,215. That places the brokerage’s near-term upside case at about 19%, while its FY27E and FY28E assumptions point to RoA of around 4.2% and RoE in the 15–16% zone.

Investment stance

The core investment case is straightforward: Home First appears to be regaining operating rhythm just as its growth levers become more visible. Disbursement acceleration, improving asset-quality trends, healthy spreads, and a fortified capital position all support ICICI Securities’ decision to keep the stock at BUY (Maintain).

The main risks are equally explicit. The brokerage flags slower-than-expected AUM growth if disbursement momentum fades, and a possible rise in stage-3 assets if LAP exposure grows faster than expected. Even so, the report’s tone is constructive: Home First is not merely recovering; it is trying to reset for a higher-growth phase in FY27 and beyond.