Home First Finance - Tech-Led Affordable Housing Play At Affordable Valuations: ICICI Securities
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ICICI Securities Report
Home First Finance Company India Ltd., an affordable housing financier with AUM of Rs 39 billion and focus on salaried housing loans, has several value propositions that differentiate it from peers in high growth, high yielding, hugely untapped affordable housing finance segment:
- 75% customers in EWS/LIC category and 32% being new to credit
- technology at its core – right from sourcing to collections
- well-trained/educated team to appropriately assess need and right size loans
- paperless loan processing with quick TAT of <48 hours
- omni-channel lead generation driving sourcing
Few risks include:
i) Sourcing as well as collections managed by front-end team;
ii) borrowing profile not fully explored yet;
iii) apartment home loans showing some stress (in pockets).
With >30% AUM growth, funding cost benefit, improved cost to income and contained credit cost, we expect earnings to compound at >40% over FY21-23E.
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