HomeFirst profit rises 34.45% as operating margin narrows again
Standalone revenue grew 18.61% YoY, but expenses rose 24.25%; a lower tax rate also aided profit growth.
Filed 27 Jul 2026, 17:48 IST · after market close · Home First Finance Company India Ltd (HOMEFIRST)
Key takeaways
- Standalone net profit rose 34.45% YoY to Rs 159.85 cr, helped partly by a 1.02 percentage-point fall in the tax rate.
- Operating margin narrowed 0.91 percentage points YoY to 79.95% as expenses grew 24.25%, faster than revenue growth of 18.61%.
- Management said quarterly disbursements reached a record Rs 1,628 cr while Gross Stage 3 remained stable at 1.8%.
Price around the results
Profit growth outpaced revenue, with limited help from other income
HomeFirst’s standalone profit before tax grew 32.67% YoY, ahead of the 18.61% increase in revenue, while net profit rose 34.45%. Other income accounted for only 0.88% of pre-tax profit, so reported earnings were not materially dependent on that source. The tax rate fell 1.02 percentage points to 23.01%, giving net profit an additional lift.
Faster cost growth trims the operating margin
Expenses grew 24.25% YoY against revenue growth of 18.61%, narrowing the operating margin by 0.91 percentage points. The same pattern appeared sequentially: expenses rose 9.57% while revenue increased 7.30%, reducing the margin by 0.42 percentage points. Interest expense also increased 4.08% YoY and 6.72% QoQ.
Margin has declined for three successive quarters
Operating margin fell from 81.57% in Q2FY26 to 80.80% in Q3FY26, 80.37% in Q4FY26 and 79.95% in Q1FY27. Despite that direction, HomeFirst remained 7.73 percentage points above the 72.22% median operating margin of 22 Financial Services peers that had reported.
Management links growth to wider distribution and stable asset quality
Management said disbursements reached a record Rs 1,628 cr during the quarter, with growth spread across geographies and distribution channels. The company said it added four branches, taking the network to 175 branches and 373 touchpoints, and added 133 net employees, mainly in customer-facing roles. Management said Gross Stage 3 remained stable quarter-on-quarter at 1.8% and expressed confidence in delivering approximately 25% AUM growth while maintaining profitability, portfolio quality and operating efficiency.
Results were filed after market close
The standalone results were filed at 17:48 IST after market close, so there is no post-results market move to assess yet. Across the last eight result reactions, the stock fell five times and the median absolute move was 3.05%.
Q1FY27 at a glance
Standalone figures as filed with NSE — filed ahead of third-party databases, not yet independently cross-checked.
| Line item | Q1FY27 | Q4FY26 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹538 cr | ₹501 cr | +7.30% | +18.61% |
| Other income | ₹2 cr | ₹3 cr | -45.05% | +10.91% |
| Expenses | ₹108 cr | ₹98 cr | +9.57% | +24.25% |
| Operating profit | ₹430 cr | ₹403 cr | +6.74% | +17.27% |
| Operating margin (%) | 79.95% | 80.37% | — | — |
| Interest | ₹208 cr | ₹195 cr | +6.72% | +4.08% |
| Depreciation | ₹5 cr | ₹5 cr | +3.92% | +21.00% |
| Profit before tax | ₹208 cr | ₹195 cr | +6.37% | +32.67% |
| Tax | ₹48 cr | ₹46 cr | +4.46% | +27.04% |
| Net profit | ₹160 cr | ₹149 cr | +6.97% | +34.45% |
| EPS (₹) | ₹15.31 | ₹14.35 | +6.69% | +30.97% |
Operating margin of 79.95% compares with a Financial Services sector median of 72.22% across 22 peers that have reported Q1FY27.
What management said
From the company’s own investor presentation. Each point is checked against the source document before it appears here.
This quarter
- Disbursements reached a record ₹1,628 crore during the quarter, with growth broad-based across geographies and distribution channels.
- Asset quality remained stable quarter-on-quarter, with Gross Stage 3 at 1.8%.
Guidance & outlook
- HomeFirst remains confident of delivering approximately 25% AUM growth while maintaining profitability, portfolio quality and operating efficiency.
- The company remains optimistic about opportunities in the affordable housing finance sector.
Expansion
- HomeFirst added four branches during the quarter, taking its network to 175 branches and 373 touchpoints.
- The company added 133 net employees, primarily in customer-facing roles, bringing total employee strength to 1,988.
New initiatives
- The company continued its Green Homes initiative, certifying 100 additional homes and reaching 550 certified homes by June 2026.
Problems & risks
- The company said geopolitical developments and global macro uncertainties continue to require close monitoring.
What to watch
- Whether operating margin holds above 79.95% after three successive quarterly declines.
- Whether Gross Stage 3 remains at or below 1.8%.
- Progress against management’s stated approximately 25% AUM growth objective.