Home First Finance Q2 net profit jumps 43% on strong AUM growth, loan disbursements

Technology-driven affordable housing finance company Home First Finance Ltd

on Tuesday (November 4) reported a 43% year-on-year increase in net profit to ₹132 crore for Q2FY26, up from ₹92 crore in the same period last year. Net interest income (NII) grew 31.9% to ₹206.5 crore versus ₹156.6 crore a year ago.

Total income for the quarter stood at ₹479 crore, up 28% on a year-on-year basis, while pre-provision operating profit (PPOP) increased 49.5% to ₹188 crore. Return on assets (ROA) rose 10 basis points to 3.8%, and return on equity (ROE) stood at 13.4%, with pre-money adjusted ROE at 16.7%.

Home First Finance’s assets under management (AUM) grew 26.3% year-on-year to ₹14,178 crore, with a quarterly growth of 5.2%. Housing loans accounted for 83% of AUM, and the economically weaker sections (EWS) and low-income groups (LIG) made up approximately 60% of the customer base. Q2 disbursements were ₹1,289 crore, marking a 9.6% year-on-year increase.

The company operated 163 branches across 13 states/UTs, with a total of 366 touchpoints. Asset quality remained stable, with an October 2025 bounce rate of 17.4%, 1+ DPD at 5.5%, 30+ DPD at 3.7%, and gross stage 3 (GNPA) at 1.9%.  Credit cost for the quarter was 40 basis points. Expected credit loss (ECL) provisions stood at ₹94 crore, with a total provision-to-loans ratio of 0.8% and GNPA to provision coverage ratio at 40.8%.

Total borrowings, including debt securities, were ₹9,653 crore, with a liquidity buffer of ₹4,280 crore. Cost of borrowings decreased 30 basis points from Q1FY26 to 8.1%, and ex-CL spread on loans rose 20 basis points quarter-on-quarter to 5.3%. Capital adequacy remained strong, with CRAR at 48.4% and Tier I capital at 48%. Net worth increased to ₹4,014 crore from ₹3,855 crore in June 2025.

Manoj Viswanathan, MD and CEO, said, "At HomeFirst Finance, Q2 FY26 was another quarter of disciplined growth and steady execution, with the backdrop of a subdued macro environment marked by prolonged monsoons and tariff hikes. Our AUM reached ₹14,178 crore, up 26.3% YoY and 5.2% QoQ.

On the liability side, proactive management helped us lower our cost of borrowings by 30 bps QoQ, supporting an ex-co-lending spread of 5.3%, up 20 bps. Profitability was robust: PAT came in at ₹132 crore, up 43.0% YoY and 10.9% QoQ, delivering a RoA of 3.8%. Reported ROE was 13.4% post our recent equity raise; on a pre-money adjusted basis, ROE stands at 16.7% - a better reflection of underlying earnings power."

Shares of Home First Finance Company India Ltd ended at ₹1,195.75, down by ₹58.50, or 4.66%, on the BSE.