HomeFirst profit rose 29.08% as operating margin recovered
Standalone margin improved sequentially after three quarters of decline, while management reported record disbursements and stable asset quality.
Filed 27 Oct 2026, 17:57 IST · after market close · Home First Finance Company India Ltd (HOMEFIRST)
Key takeaways
- Standalone net profit rose 29.08% year on year to Rs 170.19 cr, helped by a 0.48 percentage-point decline in the tax rate.
- Operating margin expanded 1.81 percentage points sequentially to 79.79% as revenue grew 5.39% while expenses fell 3.29%.
- Management said quarterly disbursements reached Rs 1,705 cr, while Gross Stage 3 reduced 10 basis points sequentially to 1.7%.
Price around the results
Profit growth came with limited support from other income
HomeFirst’s standalone net profit grew 29.08% year on year, faster than revenue growth of 18.79%, as operating profit increased 19.48%. Other income contributed only 0.02% of pre-tax profit, so the earnings increase was not dependent on a non-operating gain. Interest expense still rose 10.85% year on year, but pre-tax profit increased 28.27%.
Sequential margin recovery breaks the recent slide
Revenue grew 5.39% sequentially while expenses declined 3.29%, lifting operating margin by 1.81 percentage points. The margin had declined for three consecutive quarters, from 79.33% in Q2FY26 to 77.98% in Q1FY27, before recovering to 79.79% this quarter. The year-on-year margin improvement was smaller at 0.46 percentage points because expenses still grew 16.13%, although more slowly than revenue.
Management linked growth to wider distribution and lending momentum
Management said quarterly disbursements reached Rs 1,705 cr and that six branches were added, taking the network to 181 branches and 379 touchpoints. The company told analysts that Gross Stage 3 fell 10 basis points sequentially to 1.7%, while spreads excluding co-lending moderated by 10 basis points. Management said its priorities for the rest of FY27 include sustaining growth, preserving portfolio quality, protecting profitability and improving operating efficiency.
Margin remains above the reported financial-sector median
HomeFirst’s 79.79% operating margin was 19.22 percentage points above the 60.57% median for 34 Financial Services peers that had reported the same quarter. The results were filed after market close, so there is no reported immediate stock reaction. After its last eight results, the stock rose twice and fell six times, with a median absolute move of 2.93%.
Q2FY27 at a glance
Standalone figures as filed with NSE — filed ahead of third-party databases, not yet independently cross-checked.
| Line item | Q2FY27 | Q1FY27 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹567 cr | ₹538 cr | +5.39% | +18.79% |
| Other income | ₹0 cr | ₹2 cr | -97.27% | -97.11% |
| Expenses | ₹115 cr | ₹118 cr | -3.29% | +16.13% |
| Operating profit | ₹452 cr | ₹420 cr | +7.83% | +19.48% |
| Operating margin (%) | 79.79% | 77.98% | — | — |
| Interest | ₹225 cr | ₹208 cr | +7.75% | +10.85% |
| Depreciation | ₹6 cr | ₹5 cr | +6.79% | +24.67% |
| Profit before tax | ₹222 cr | ₹208 cr | +7.02% | +28.27% |
| Tax | ₹52 cr | ₹48 cr | +8.87% | +25.68% |
| Net profit | ₹170 cr | ₹160 cr | +6.47% | +29.08% |
| EPS (₹) | ₹16.28 | ₹15.31 | +6.34% | +27.59% |
Operating margin of 79.79% compares with a Financial Services sector median of 60.57% across 34 peers that have reported Q2FY27.
What management said
From the company’s own investor presentation. Each point is checked against the source document before it appears here.
This quarter
- Quarterly disbursements reached a record ₹1,705 crore in Q2 FY27.
- Asset quality remained stable, with Gross Stage 3 reducing by 10 basis points sequentially to 1.7%.
Guidance & outlook
- HomeFirst’s priorities for the remainder of FY27 are to sustain growth, preserve portfolio quality, protect profitability and improve operating efficiency.
- The company aims to convert business growth into consistent earnings, healthy returns and long-term shareholder value as its franchise scales.
Expansion
- HomeFirst added six branches during the quarter, taking its network to 181 branches and 379 touchpoints.
New initiatives
- HomeFirst’s Green Homes initiative certified 100 additional homes during the quarter, taking the cumulative total to 650.
- HomeFirst raised Rs 280 crores from IFC through up to seven-year debt to finance affordable and green housing.
- HomeFirst’s live AI products include underwriting, customer communication, banking analysis and multilingual document interpretation capabilities.
Problems & risks
- Spreads excluding co-lending moderated by 10 basis points during the quarter.
What to watch
- Whether operating margin holds above 79.79% after the sequential recovery.
- Whether Gross Stage 3 remains at or below 1.7% as disbursements build from Rs 1,705 cr.
- Whether spreads excluding co-lending stabilise after the 10-basis-point moderation.