Are Home First Finance Company India Ltd latest results good or bad?

Home First Finance Company India Ltd's latest financial results for Q3 FY26 indicate a company maintaining operational momentum despite some fluctuations in growth rates. The net profit reached ₹140.20 crores, marking a sequential growth of 6.33% from the previous quarter and a significant year-on-year increase of 43.99%. This represents the highest quarterly profit in the company’s history, showcasing its ability to convert revenue growth into bottom-line performance effectively.
Interest earned for the quarter was ₹480.78 crores, reflecting a sequential growth of 1.03% and a robust year-on-year expansion of 18.76%. This marks the seventh consecutive quarter of sequential growth in interest income, indicating steady loan book expansion. The PAT margin improved to 29.16%, up from 27.71% in the previous quarter, demonstrating effective cost management and operational leverage.

However, the company's return on equity (ROE) stood at 11.28%, which, while positive, suggests room for improvement compared to peers in the housing finance sector. The return on capital employed (ROCE) of 11.14% also reflects moderate capital efficiency, indicating that the company has yet to achieve the superior capital deployment levels characteristic of industry leaders.

The financial performance is complemented by a notable increase in employee costs, which rose by 25.14% year-on-year, outpacing revenue growth. This trend may pose challenges for future margin sustainability if not managed carefully.

Overall, Home First Finance's results underscore a strong operational performance with record metrics, but the company also faces challenges related to valuation concerns and capital efficiency. The company saw an adjustment in its evaluation, reflecting the ongoing dynamics in its financial performance and market positioning.