Consumer Analyst / Channel Surveillance Specialist, Trudence Capital Advisors

Pranav Bhavsar

Consumer Analyst / Channel Surveillance Specialist

Trudence Capital Advisors

Trudence Capital Advisors Private Limited is a SEBI-registered Research Analyst, holding SEBI registration number INH000015747. Our firm is dedicated to providing independent and unbiased research on Indian mid to large-cap companies. Trudence Capital is known for its counter-consensus views, with a focus on forensic research and on-ground primary investigations. Our research approach is thorough, involving detailed analysis of accounting practices and governance, alongside extensive channel checks.

Independent & Unbiased Research

Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/home-first-finance-company-india" target="_blank" data-smartkarma-citation="entities:28865:1" rel="noopener">Home First Finance (HOMEFIRS IN)</a> lends to a customer segment exposed to high income volatility.</li>
<li>Soft bounces are used by customers to manage their cash flow, with bounce charge collection done on a best-effort basis, management attitude towards financial discipline warrants attention. </li>
<li>While there may not be any immediate asset quality issues, caution is warranted. </li>
</ul>



Home First Finance (HOMEFIRS IN) lends to a customer segment exposed to high income volatility.
Soft bounces are used by customers to manage their cash flow, with bounce charge collection done on a best-effort basis, management attitude towards financial discipline warrants attention. 
While there may not be any immediate asset quality issues, caution is warranted. 


Home First Finance (HOMEFIRS IN) | The Bounce Mystery & Way Forward

<ul>
<li>We interact with <a href="https://www.smartkarma.com/entities/home-first-finance-company-india" target="_blank" data-smartkarma-citation="entities:28865:1" rel="noopener">Home First Finance (HOMEFIRS IN)</a>  branch managers to understand the reason behind the increase in bounce rates.</li>
<li>The overall NACH data also shows a high rejection rate in October despite being a festive month, which is surprising.</li>
<li>With 92% of <a href="https://www.smartkarma.com/entities/home-first-finance-company-india" target="_blank" data-smartkarma-citation="entities:28865:1" rel="noopener">Home First Finance (HOMEFIRS IN)</a> loans being disbursed in less than 48 hours, this focus on TAT could lead to higher than industry-average asset quality issues. </li>
</ul>


We interact with Home First Finance (HOMEFIRS IN)  branch managers to understand the reason behind the increase in bounce rates.
The overall NACH data also shows a high rejection rate in October despite being a festive month, which is surprising.
With 92% of Home First Finance (HOMEFIRS IN) loans being disbursed in less than 48 hours, this focus on TAT could lead to higher than industry-average asset quality issues. 


Home First Finance (HOMEFIRS IN) | Bounce Rate and Sales Pressure

External broker reports(aggregated public sources), Motilal Oswal Financial Services Limited

Motilal Oswal

External broker reports(aggregated public sources)

Motilal Oswal Financial Services Limited

Motilal Oswal Financial Services Limited is an Indian diversified financial services firm offering a range of financial products and services. 

Content available is external broker reports authored by a third party outside the Smartkarma network and has been aggregated by an online aggregator through publicly available sources and is displayed by Smartkarma in this format for user's convenience and general informational purposes only. Content does not constitute investment or financial advice and Smartkarma makes no representation or warranty regarding its accuracy or contents. Original third party author retains all copyright and other proprietary rights in the content. Access or use of third party links not controlled by Smartkarma are at the user's own risk.

<ul><li>HomeFirst’s 2QFY23 PAT grew 21% YoY/6% QoQ to INR543m (in-line).</li><li>Credit costs grew 37% QoQ to INR50m (MOFSLe: INR31m).</li><li>Underlying this, the NII grew 58% YoY to ~INR1b (in-line).</li></ul><p><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></p>

HomeFirst’s 2QFY23 PAT grew 21% YoY/6% QoQ to INR543m (in-line).Credit costs grew 37% QoQ to INR50m (MOFSLe: INR31m).Underlying this, the NII grew 58% YoY to ~INR1b (in-line).Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Home First Finance Company - Earnings In-Line with Sustained Improvement in Asset Quality

<ul>
<li>
<a href="https://www.smartkarma.com/entities/home-first-finance-company-india" target="_blank" data-smartkarma-citation="entities:28865:1" rel="noopener">Home First Finance (HOMEFIRS IN)</a> is growing fast and has a low operating cost, there is a reason why. </li>
<li>
<a href="https://www.smartkarma.com/entities/aavas-financiers-ltd" target="_blank" data-smartkarma-citation="entities:27422:1" rel="noopener">Aavas Financiers Ltd (AAVAS IN)</a> operates in its own specific domain taking only risks that it is comfortable with.  </li>
<li>Competitive feedback is positive for <a href="https://www.smartkarma.com/entities/iifl-holdings-ltd" target="_blank" data-smartkarma-citation="entities:20197:1" rel="noopener">IIFL Holdings (IIFL IN)</a> 's HF subsidiary. <a href="https://www.smartkarma.com/entities/capri-global-capital-ltd" target="_blank" data-smartkarma-citation="entities:18094:1" rel="noopener">Capri Global Capital (CGCL IN)</a> seems to be following AU Bank's footsteps, but hopefully only in underwriting.</li>
</ul>



Home First Finance (HOMEFIRS IN) is growing fast and has a low operating cost, there is a reason why. 

Aavas Financiers Ltd (AAVAS IN) operates in its own specific domain taking only risks that it is comfortable with.  
Competitive feedback is positive for IIFL Holdings (IIFL IN) 's HF subsidiary. Capri Global Capital (CGCL IN) seems to be following AU Bank's footsteps, but hopefully only in underwriting.


India Channel Insight #44 | Home First, Aavas, IIFL Home Finance, Capri Global

External broker reports(aggregated public sources), Edelweiss Broking Limited

Edelweiss

<p>Financing homes for India's middle class</p><div class="content-highlight"><em>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.</em></div>

Financing homes for India's middle classContent is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

India

Home First Finance Company India Limited provides housing finance services. The Company offers home loan, mortgage finance, eligibility calculating, and customers support services. Home First Finance Company serves customers in India.

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Home First Finance (HOMEFIRS IN)