Home First Finance Q3 Results Review - Strong Performance Continues: Yes Securities

Yes Securities Report

Home First Finance Company Ltd. delivered a material 8% beat on our pre-provision operating profit expectations, aided by net interest income beat of 3% and 4% lower-than-estimated opex.

Key highlights of this consistently robust performance were-

1. stronger-than-expected disbursements/assets under management growth,

2. moderated balance transfer out,

3. adeptly managed portfolio spread,

4. benign credit cost on improvement in delinquency buckets and

5. enhancement of stage-III coverage.

Return on asset was sustained at an elevated level of 3.8% and return on equity further rose to 13.7%. Trajectory of portfolio spread compression would be a key monitorable from hereon, but loan growth and asset quality would stay resilient in our view.

Our FY23/24 earnings estimates have seen an upgrade of 3-4%, mainly on raising of loan growth assumptions. We estimate RoA delivery of average 3.5% over FY23-25 with RoE surpassing 15% in FY25.

Consistent strong execution on growth and asset quality underscores our conviction on Home First.

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