Prabhudas Lilladher has issued a Hold rating on Home First Finance Company India with a target price of ₹1350 in its research report dated May 08, 2026. According to the report, the brokerage has downgraded the stock to ACCUMULATE as the stock has run up by 21% in the past month, indicating potential overvaluation at current levels. As of May 7, 2026, HFFC traded around ₹1,204.7, reflecting some investor caution after the sharp ascent.
The company demonstrated robust growth in Q4 with disbursements growing 24.9% year-on-year and AUM increasing 25% YoY to ₹15,878 crore. As reported by Prabhudas Lilladher, the company's commentary guided for 25% AUM growth in FY27 led by recovery in Tamil Nadu and Karnataka markets and deeper penetration across both new and existing markets. HFFC reported net profit of ₹149.45 crore, up 42.7% year-on-year, bolstered by a 36.5% rise in net interest income. Management expressed confidence in its business model, projecting another 25% AUM expansion for FY27, reflecting sustained demand in the affordable housing segment.
The brokerage expects FY27/28E spreads to see a slight moderation as the portfolio reprices, with hardening bond yields likely to exert some pressure. According to Prabhudas Lilladher, credit cost is likely to be benign with an improvement to 33/32 basis points in FY27/FY28E versus 40 basis points in FY26. The company anticipates improvement in operating expenses to flow through as productivity benefits materialize. Looking ahead, analysts foresee potential pressures on HFFC's profitability with net interest margins expected to moderate slightly in FY27 and FY28 as loan portfolios reprice and bond yields increase.
Prabhudas Lilladher has increased its FY27/FY28E estimates factoring in stable net interest margin and operating expenses. The brokerage has tweaked its multiple slightly to 2.5x from the earlier 2.4x, maintaining a target price of ₹1,350. Despite short-term valuation concerns, the analyst community largely maintains a positive view on HFFC. The consensus rating is 'Buy' or 'Strong Buy,' with an average 12-month price target of around ₹1,337, suggesting potential upside from current levels. Brokerages initiating coverage have set price targets up to ₹1,375, underscoring confidence in HFFC's future growth driven by its technology-centric approach, market expansion, and efficient operations.
