Home First Finance Q3 Results: Profit Jumps 44% on Strong AUM Growth

Introduction

Home First Finance Company India Ltd. announced a robust financial performance for the third quarter of fiscal year 2026, ending December 31, 2025. The company reported a significant 44% year-on-year increase in net profit, reaching ₹140.2 crore. This growth was primarily driven by strong expansion in Assets Under Management (AUM), stable asset quality, and consistent housing loan disbursements, underscoring the company's sustained momentum in the affordable housing finance sector.

Detailed Financial Performance

The company's profitability saw a substantial uplift during the quarter. Net profit surged to ₹140.2 crore from ₹97.7 crore in the corresponding quarter of the previous fiscal year. This was supported by a parallel 44% rise in Net Interest Income (NII), which grew to ₹234.8 crore in Q3 FY26 compared to ₹163.1 crore in Q3 FY25. Total income for the quarter also registered a healthy 18.7% year-on-year growth, amounting to ₹484 crore. The strong earnings performance led to an improvement in key profitability indicators. Return on Assets (RoA) improved to 4.0% from 3.4% a year ago, while Return on Equity (RoE) stood at a healthy 13.7%.

Growth in Assets and Disbursements

Home First Finance continued its strong trajectory in growing its loan book. Assets Under Management (AUM) expanded by 24.9% year-on-year, reaching ₹14,925 crore as of December 2025. On a sequential basis, AUM grew by 5.3%. The company's focus on its core business remained evident, with housing loans constituting 83% of the total AUM. Disbursements during the quarter were also strong, totaling ₹1,318 crore, which marks a 10.5% increase from the same period last year and a 2.2% growth from the preceding quarter. This consistent growth in disbursements highlights the sustained demand for affordable housing finance.

Key Financial Highlights

Stable Asset Quality

Despite the aggressive growth in its loan portfolio, Home First Finance maintained stable asset quality. Gross Stage 3 assets, a key indicator of non-performing loans, stood at 2.0% for the quarter. The credit cost for Q3 FY26 was contained at 40 basis points, reflecting prudent risk management practices. The company's ability to manage asset quality while expanding its reach, particularly in the economically weaker sections (EWS) and low-income groups (LIG), remains a key operational strength. These customer segments constitute approximately 60% of the company's overall customer base.

Robust Capitalisation

The company's balance sheet remains well-capitalised to support future growth. The total Capital Adequacy Ratio (CRAR) was exceptionally strong at 49.0% as of December 2025, with Tier I capital at 48.6%. This is significantly above the regulatory requirements and provides a substantial buffer for business expansion and to absorb any unforeseen shocks. The company's net worth also increased to ₹4,180 crore, further strengthening its financial position.

Sustained Quarterly Momentum

The performance in the third quarter continues the positive trend observed in the previous quarter. In Q2 FY26, the company had reported a 43% year-on-year rise in net profit to ₹132 crore, backed by a 26.3% AUM growth to ₹14,178 crore and disbursements of ₹1,289 crore. This consistency demonstrates the effectiveness of the company's business strategy and its ability to execute it efficiently across different operating periods.

Management Outlook

Manoj Viswanathan, the Managing Director and CEO of Home First Finance, expressed confidence in the company's trajectory. He noted the resilience of the Indian economy and stated that the company is well-positioned to achieve a 25% year-on-year growth in AUM. This forward-looking statement suggests that the management expects the growth momentum to continue, driven by strong underlying demand in the affordable housing segment.

Market Reaction

Investors responded positively to the strong quarterly numbers. On January 22, the day of the announcement, the shares of Home First Finance Company India Limited closed at ₹1,051.60 on the stock exchange, marking an increase of ₹9.10 or 0.87%.

Conclusion

Home First Finance's Q3 FY26 results highlight a period of strong, all-round growth. The company successfully delivered robust profit and NII growth, expanded its loan book significantly, and maintained both stable asset quality and a strong capital base. The consistent performance and positive management outlook position the company well to capitalize on the opportunities within India's affordable housing finance market.