Thank you, Farah. Good afternoon, ladies and gentlemen, and welcome to Home First Finance Company's earnings conference call to discuss the financial results for the quarter and financial year ended March 31st, 2026.

We hope you have had the chance to review our investor presentation and press release, both of which are available on our website and stock exchanges. As per our practice, we have also uploaded an Excel fact sheet containing historical data on our website for your easy reference.

From the management, we have with us today Mr. Manoj Viswanathan, MD and CEO; Ms.

Nutan Gaba Patwari, CFO. With that, I now invite Mr.

Viswanathan to share his insights on overall performance and outlook. Over to you, sir.

Thank you, Sunil. Good afternoon, everyone, and thank you for joining us today.

FY '26 has been a year of resilience and disciplined execution for Home First. We ended the year with healthy growth, record disbursements in quarter four, over 41.4% profit growth for the full year, improving asset quality, and a balance sheet that remains very well-capitalized.

What is important to us is not any one of these metrics in isolation, but the fact that all of them moved in the right direction together. We continue to grow well.

Our asset under management stood at Rs 15,878 crores as of March '26, up 24.9% year-on-year and 6.4% sequentially. Disbursement in quarter four was the highest ever at Rs 1,572 crores, up 23.5% year-on-year and 19.3% Q-o-Q.

For FY '26, the disbursements stood at Rs 5,424 crores, a growth of 12.9% over FY '25. The strong exit run rate in quarter four gives us confidence as we enter FY '27.

Profitability remained robust. For FY '26, PAT stood at Rs 540 crores, up 41.4% year-on-year.

Reported return on equity for FY '26 was 15.7%, and on a pre-money basis, adjusted ROE stood at 16.8%. Even as we delivered this performance, we continue to invest for the next phase of growth.

During the quarter, we added 6 new branches and 5 touchpoints, increasing the network to 171 branches and 373 touchpoints. During 2026, we also added 221 employees, largely customer-facing roles, taking our total headcount to 1,855.

Our origination yield continues to be healthy at 13%, with an 83% share of individual housing loans. That consistency in mix is important because it reflects both the strength of our core franchise and the granularity of our portfolio.

Now coming to asset quality, one of our key priorities over the last few quarters has been to strengthen the portfolio quality from the front end by tightening our focus on early buckets, collection discipline, and resolution intensity. We are pleased with the pronounced improvement visible this quarter.

Our 1+ DPD is at 4.7%, down 60 basis points sequentially. 30+ DPD improved to 3.2%, down by 50 basis points sequentially.

Stage 2 reduced by 30 basis points to 1.4%. Gross Stage 3 improved to 1.8%, down by 20 basis points quarter-on-quarter.

Early indicators from April demonstrate good collection outcomes compared to the same month in previous years. Fresh slippage percentage is lower than what was seen in April 2025 as well as April 2024.

We have not yet observed any significant impact from the ongoing war in the Middle East. Let me now touch upon state-wise trends.

To start with, all senior leadership positions in the branch network have been filled across all states and are now fully focused on delivering strong results in this financial year. Gujarat, MP, and Rajasthan are showing healthy growth and stable asset quality.

Maharashtra has regained strong momentum, particularly in Mumbai and Pune, reflected in a robust AUM trajectory. All the southern states are on track for strong growth in this financial year, including Tamil Nadu and Karnataka.

Also, the e-khata issues mostly behind us. In UP, the team is being built and we are preparing a strong base for FY '28.

Technology remains one of the key differentiators of Home First. It is central to how we source, underwrite, service, and scale the business.

Home First deep-rooted digital DNA, built consistently since inception, has created a strong foundation for accelerated AI adoption across the value chain. This digital-first approach has also given us clean, structured data assets stretching back to day one of the company, providing the high-quality training ground that modern AI systems demand.

Our AI strategy is anchored on three outcomes: elevating customer experience, enhancing employee productivity, and driving structural cost efficiencies. In line with this framework, we have already operationalized proprietary AI agents for income assessment and contextual bank statement analysis.

Parallelly, AI-led interventions in lead qualification, legal and technical valuation, and bureau analysis are currently in pilot and will progressively move to production as we scale our intelligent underwriting stacks. On sustainability, our green homes initiative continued to make progress.

We certified 140 additional homes during the quarter, taking the cumulative total to 450 as of March 2026. As we look ahead, we are entering FY '27 from a position of strength.

Growth momentum is healthy, asset quality is improving, margins remain robust, the balance sheet is strong, and the investments we are making in distribution, people, and technology are intended to support durable growth, not just near-term growth. Based on where we are today, we are positioned to deliver around 25% year-on-year AUM growth.

Our focus remains clear: grow with discipline, protect portfolio quality, improve productivity, and deepen our customer franchise, and continue delivering strong and sustainable profitability. With that, I now hand it over to Nutan to take you through the financial performance in more detail.

Over to you, Nutan.

Thank you, Manoj, and good afternoon, everyone. I will take you through the key financial highlights for the quarter and the full year.

Let us start with the income statement. Total income for the quarter stood at Rs 505 crores, up by 21.3% Y-o-Y and 4.4% quarter-on-quarter.

Specifically, on the interest on term loans went up from Rs 406 crores in quarter three to Rs 412 crores in quarter four, presenting 1.6% quarter-on-quarter increase. As against average principal outstanding growth of 5.5% on a quarter-on-quarter basis in the interest income on term loans, 2 lesser days in the quarter, that is quarter four versus quarter three, impacted by 2.2%, 10 basis point PLR cut impacted by 80 basis points, and origination yield had an impact of another 80 basis points.

That wraps up the interest on term loans. Portfolio yields excluding co-lending stood at 13.2%, while dispersal yields for the quarter stood at 13%, reflecting continued pricing discipline and healthy customer acquisition quality.

On the liability side, through proactive borrowing mix management, we were able to contract our cost of borrowing excluding co-lending by 10 basis points to 7.9%. Incremental borrowing costs during the quarter remained favorable at around 7.6%, which gives us confidence in the resilience of our spread profile.

As a result, our spread excluding co-lending remained healthy at 5.3%. Yields have to be looked at a portfolio level, and we run a 100% floating asset book, allowing us the ability to reprice as cost of borrowing moves.

This is an essential element of our financial strategy to not carry any interest rate risk on our balance sheet. Our aim remains to deliver spread at a portfolio level in our guided range of 5% to 5.25%.

Net interest margin for quarter four stood at 5.9%. While there was a modest sequential compression of 10 basis points, NIM remains robust and continues to reflect the strength of our business model.

For FY '26, NIM stood at around 5.7%. Moving to operating efficiency, it remains strong.

Cost to income for quarter four was 32%, improving 10 basis points sequentially. For FY '26, the cost to income stood at 32.5%, an improvement of 330 basis points.

This is particularly encouraging because it comes alongside continued investments in distribution, headcount, and technology. As a reminder, the full-year opex includes a one-time gratuity provision of Rs 3.3 crores recorded earlier in quarter three arising from the implementation of the new labor code.

Operating cost to assets was 2.7% for the quarter as well as for the full year. As we continue to invest for growth, we expect this ratio to remain broadly range-bound within 2.6% to 2.7%.

Pre-provision operating profit in quarter four stood at Rs 212 crores, up by 44.9% Y-o-Y. This reflects the operating leverage inherent in the franchise as the book continues to scale.

Profit after tax for quarter four stood at Rs 149 crores, up by 42.7% Y-o-Y and 6.6% Q-o-Q. For FY '26, profit after tax stood at Rs 540 crores, representing 41.4% Y-o-Y growth.

Return on assets of 3.9% and return on equity of 15.7%. Following the Rs 1,250 crore QIP completed earlier in April, our balance sheet remains very well-capitalized.

On a pre-money basis, adjusted ROE for FY '26 stood at 16.8%. Moving on to provisions and asset quality, credit cost for quarter four and the year stood at 40 basis points.

Provision on Stage 3 assets was increased to 24% as of March '26 from 22% in December '25. We continue to follow a conservative provisioning approach and maintain overlays above ECL requirement.

As of March '26, our total provision coverage ratio stood at 44.9%. We believe this reflects the prudence with which we manage the balance sheet while preserving adequate flexibility for growth.

Now coming to borrowings and liability profile, our funding profile continues to be well-diversified and cost-effective. As of March '26, 59% of funding came from private and public banks, 15% from NHB, 20% from assignment and co-lending, the balance from NCDs, ECBs, and NHB refinance.

During quarter four, we executed direct assignment transaction of Rs 264 crores. In co-lending, disbursement for FY '26 doubled, rising from Rs 153 crore in FY '25 to Rs 307 crores in FY '26.

The co-lending book grew to Rs 593 crores and now represents 3.7% of AUM. In FY '27, we will continue to scale the co-lending business by further strengthening the enabling infrastructure.

This product line provides an opportunity to serve a wider customer base while driving enhanced productivity and returns. Finally, on capital adequacy and liquidity, as of March '26, our capital to risk-weighted assets ratio stood at 44.1%, with Tier 1 at 43.8%.

As of March '25, prior to April QIP, our capital adequacy stood at 32.8%, with Tier 1 at 32.5%. Our net worth stood at Rs 4,357 crores, and book value per share is Rs 480 as of March '26.

This positions us well to continue investing in growth while maintaining a disciplined risk framework. With that, we conclude our opening remarks and are now happy to take your questions.

Thank you for taking my question. Am I audible?

Yes,

Thank you. Manoj, two questions.

One is maybe near-term, what we have seen over the last one year, and then maybe I'll move to the second question. The first question is more around if you look at this financial year which we just ended, the first part of the year was a little bit about weakness both in terms of demand as well as I would say asset quality.

Then when we move to the third quarter, we saw some semblance of stability coming in, and then fourth quarter, obviously, we have ended on a high note, whether we look at the disbursement momentum, whether we look at the improvement in asset quality that we have reported. Just trying to understand, the first half weakness which was there, that was more demand-led, and are you seeing demand improve now as you've exited 4Q?

That is the first part of the question. The other thing is you'll remember first half of this fiscal year, we also spoke about weakness in asset quality, predominantly part of it coming from some impact of US tariffs.

How is credit trending now is something I wanted to understand. I remember you saying in your opening remark that April '26 was better than April '25 and '24.

Just trying to understand how are these two things, demand and credit, trending right now?

Yes. First the discussion on the first half, there were two or three things which were happening simultaneously.

One was that we were just coming out of the whole overhang of the credit issue. Delinquencies were elevated.

Collection was a bit difficult. Also impacted by tariffs, etc.

There was a bit of sluggishness in demand as well at that point of time. We were also internally going through some issues.

Some of the regions were not staffed properly. There was some attrition and so on, right?

All of these things were happening simultaneously at that point, and hence a little bit of a weakness or sluggishness. As the year progressed, some of the external factors got resolved, and the internal factors also got resolved.

We started filling up all the positions. We rebuilt the teams.

Simultaneously, the external factors got resolved to some extent. The credit weakness started coming down.

Collections started improving. The tariff issue was also kind of put to rest at some point.

The demand also started from October onwards. The demand also started improving.

All these things kind of came together in the last two quarters and then helped us deliver this good results.

Got it, Manoj. Then the last question that I had was a little bit I would say medium-term strategy.

I remember you saying in your opening remarks that we are entering FY '27 from a position of strength. You also acknowledged that there were some internal challenges as well last year in terms of staffing, which you acknowledged has now been resolved.

If you could just articulate how should we look at maybe the next 2 to 3 years? You did mention that we'll be looking to grow our AUM at a 25% this year.

A, what all changes have you done this year which is giving us confidence that we'll be able to sustain that 25% growth? Then if you could also talk about how are you looking at your distribution, your expansion into newer states, or rather deepening into newer states?

Just those 2-3 points if you can cover.

Yes. One is the teams being rebuilt and all senior leadership positions being filled across the country.

I think that is a big positive with which we are entering this year. We have now the teams on the ground fully focused on delivering the results for the year.

We are not distracted with any positions to be filled or any attrition and so on and so forth. That is a big positive starting point.

Second is that we have further improved our value proposition to the distribution channels in terms of turnaround times, in terms of the wide bouquet of products that we are able to offer. There the co-lending also comes into play.

If we are going to a connector or to any distribution channel, we are able to offer them a larger bouquet of products where they can address more number of customers. It's a wider target market that they can address.

That is being well recognized by the channels, you would see there's a big jump in the number of connectors as well last quarter. That is another big positive that we're entering with.

The other you can say important development is our huge success that we have got in places like Bombay and Pune, which were traditionally seen as formal markets and where only the banks could operate, etc. We have really turned around and created a huge success there.

All of these things gives us the confidence that as for the next 2 to 3 years, we are on a very strong growth trajectory. We have understood the kind of value proposition the market wants, we're able to deliver that, and exceed the expectations of the channels.

That's what gives us the confidence that this year definitely 25% AUM growth we can deliver. Everything goes well, we should be able to kind of continue that trend over the next couple of years as well.

Got it. Thank you so much, Manoj.

That answers my questions, and I wish you and your team the very best.

Hello. Two quick questions from my end.

The first one would be that you mentioned that you're on track for growth in the southern states in FY '27. Just wanted to check how did our market shares move in, say, Karnataka and Tamil Nadu in FY '26?

Are there any specific competitors growing aggressively in these regions? That would be my first question, and I'll come back to the second.

Sure. Market shares in Tamil Nadu, Tamil Nadu was not very strong to start with, and it would have further dropped a little bit in this last year because the growth was very muted in Tamil Nadu.

We will hopefully be able to make it up in the coming couple of years because now the kind of base is ready, and the teams are there. We should be able to catch up as far as TN is concerned.

In Karnataka, it has been a fairly steady growth, except for a minor blip we had for one one or two quarters because of the e-khata issue. Otherwise, we would have sustained our market share in Karnataka.

Got it. Any specific competitors that you are sort of looking out for there or are growing aggressively in the southern states?

No new names as such. The, set of existing players, you know.

Depending on the season, depending on the year, depending on the year, there are, some players who are more active. Nothing significant to report in terms of new new competition.

Got it. Maybe then next sort of question, how do we think about risk-adjusted yields when, say, compared to other peer-play affordable housing finance players?

Do we look at that? Then if so, what's our thinking there?

On yields, our thinking is, see, that we are offering a wide bouquet of products, starting from 5 lakh ticket size to a 40 lakh ticket size, and we also do loan against property. The idea is to provide a blended yield, or rather to deliver a spread of around 5 to 5.20.

If the borrowing cost drops further from here, then there will be a corresponding decline in the yields, but overall we are looking to maintain a spread of 5 to 5.20. That is what we are looking to do.

We will do that by using this whole blend of products. There will be LAP on one side, maybe up to the extent of 20%.

There is a smaller ticket loans, which will deliver slightly higher yields, and then we have the larger ticket loans, and then anyway co-lending is there, which is yield agnostic because we are anyway getting an effective yield of about five effective spread of about 5.5 in the co-lending product. The idea is to sustain the profits and deliver a respectable or the promised ROE that we have committed to.

Helpful. I was seeing more around sort of risk-adjusted yields.

If we look at, say, the yield and take out the credit costs, how do we think about that on a portfolio basis on different segments, say different states, and then how does it compare to our peers?

See, in certain segments, it would be similar to peers. It also depends upon the kind of markets, etc., we are comparing.

Some of our peers operate in more rural or semi-rural markets where the yields would probably be higher. Also in some cases, they have a higher proportion of LAP and micro-LAP segments.

Where the yields are again higher. In comparable products, the yields will be largely comparable.

It's not going to be very different. Just to give you a range, we operate in a yield range of between, say, 12% to about 14%.

Ticket size is one axis, and the other is the nature of the product, which is whether it's LAP or housing loan. So 12% to 13.5%, 14% is generally the range in which we operate.

It doesn't vary beyond that.

Got it. Then just on that, on the LAP segment, say compared to the home loan segment, are the yields higher, and then the credit costs comparable, or let's say it will be different?

Credit costs also don't fluctuate a lot. We are talking about an overall credit cost of 40 basis points for the year.

The range will be between, say, 20 basis points to 60 basis points. We're not operating a product where credit cost is substantially higher and which has delivering a higher yield, because that is not our strategy.

Got it. For LAP also, it will be in the same range, right?

LAP also, it will be in the same range, correct.

Got it. The yields will be higher.

Is that correct?

Yield is higher. Again, we are not operating in the very high yielding LAP category.

Our LAP yields are also in the, say, 14%, 14.5% range.

Got it. No, helpful.

Thank you so much.

Hi, sir. Thank you for giving me the opportunity.

My question is pertaining to PLR. We have taken 10 basis points PLR cut last quarter.

Now with systemic rates likely to go up, would we make any adjustment there or would we continue with our pricing strategies that we have as on today?

Shreepal, we will wait for the repo hike, if at all they were to happen in the later part of the year. We will also have to watch out how banks are repricing from the MCLR line, and only if we need, we will take the decision to hike.

As I explained in my call, we are a fully floating book,

and

history also has indicated that we have the capability to increase rates as well as reduce rates. We will take a call based on as and when the hike comes through.

In the next one quarter, we are not seeing that as a possibility. In fact, I would say we should be able to maintain our cost of borrowing in quarter one in and around the levels of last quarter.

Got it. My second question was on branch expansion.

I was looking at the disbursement upon branch number, and it's already at close to 30 crore per branch. This is probably at a peak level.

Incrementally, when you say that we'll be growing at 25% growth, what is our branch expansion strategy? Where do you see the disbursement per branch as it's 100?

Also wanted to understand which locations would we add branches, and what is the number of branches or percentage of branches with disbursement per branch below 10 crore?

Generally, our strategy to put up a branch is only if the branch has the potential to reach this average branch dispersal potential, which is 2 to 3 crores a month. We would typically not put a branch where the potential is only one 1 crore a month.

That we would just operate as a touchpoint or a satellite location. Branch strategy is to add about 30 to 40 branches every year.

That is what we are planning. Productivity of the branch, obviously, the disbursement per branch should keep pinching up as we scale up.

That has always been the principle under which we are operating. Productivity of the branch and overall AUM per branch, disbursement per branch, and AUM per employee should keep on going up.

Okay. Sir, then where I'm coming from is that while we focus on business, our employee at branch level is responsible for collections as well.

In that case, the AUM per employee continues to inch up. In that case, are we planning to create a bandwidth for buckets like let's say 31 to 60 and 60 to 90 with additional bandwidth there?

No, how we facilitate this increase in productivity is only through technology and tools which are made available to the employees. The idea is to take away the time they're spending in mundane tasks and just focus their attention more on customer-facing activities.

Originating leads, closing the transaction with the customer, and collecting from more difficult customers. These are the key front-facing or the customer-facing activities that we want to spend the time of the front-end teams on.

If they are spending time on any other activity like making receipts or updating records, things like that, those we continue to keep observing and automating those activities.

Got it. Just two follow-ups here.

One was that in terms of AUM per branch, if you could highlight number of branches or percentage of branches with, let's say, AUM per branch having below 10 crore sort of a number or and also 10 to 50 crore sort of a number? The second question was, where would we plan to add this 30 to 40 branches in coming year?

Thank you.

So 30 to 40 branches would be broad-based. We are not really targeting a specific state as such.

We are looking at, it's a two-pronged strategy. There will be a few additions in new locations or new cities that we have identified across various states, and a lot of addition will also be in existing cities where we are increasing the density of the branches.

Larger cities where we have a few branches, we would be increasing the number of branches in the larger cities to improve our distribution and access to the customer. It's going to be a two-pronged strategy.

Number of branches which are less than 10 crores would be very small, it would be about I don't know, about 10, maybe 10-odd branches which are less than 10 crore in AUM.

Yeah.

The 10 to 50 crore?

Less than 50 crores you're talking about?

Yes, sir.

Less than 50 crores will be about 50 branches.

Got it. Thank you, sir.

Thank you so much for answering my questions. Good luck for the next quarter.

Thanks for taking the question. Not sure if co-lending piece got addressed.

This quarter it was low. How much time would it take to rectify this and again scale it up?

I understand that the regulatory and all the guideline changes has led to this. Is it addressed to a larger extent, and when should we again start seeing pickup in this?

It should get addressed this quarter. Some progress has been made in the first month, in April, and by end of May, hopefully all the issues should get addressed.

I think June should be a normal month.

Okay. Thereafter, the run rate of co-lending would be similar or maybe better than what we saw last year?

That's right.

Okay. Secondly, in terms of the bounce rates, we have heard from many of them that bounce rates have been better in April than that of March, okay, but I hear you that you mentioned at least it's better than that of April of previous years.

How has been it trending, and is it showing any sign of worry in any of the pockets because of the macroeconomic factors at this point in time?

No, as of now, there is absolutely no visible impact. There are sporadic anecdotal discussions going on, but really nothing that we are seeing at a central level in terms of a visible impact of this whole Middle East issue.

Okay. Got it.

Thank you.

Hi, good afternoon. Thanks for taking my questions.

My first question is on sourcing rate. Is the 13% number average for the quarter, or is that the exit sourcing rate?

Average for the quarter.

Where are we at the quarter end, the exit rates?

It's similar, Gaurav. It doesn't vary month to month, it probably will be 2 basis points plus, 2 basis points minus.

That will be the range.

See, pricing is largely centrally driven in our case. It's all algorithm-based.

Loan applications get logged in, and there is a risk-adjusted rate which gets generated and communicated to the customer, and there is a little bit of a cushion for bargaining that is left. This is a process we are following since several years.

There will not be generally a month-to-month variation once we have fixed a certain rate.

Got it. Thanks.

That's very helpful. My second question, are you seeing more competition in your product segments, your ticket sizes, by the larger housing finance companies of late?

The competition always is high, but any new incremental player?

Nothing new as such to report, frankly. It's always up and down depending upon the month or season, but otherwise there is nothing as such new or significant to report.

Got it. Okay.

No, the place where I'm coming from is effectively all of these large HFCs are losing out to the big banks in terms of the prime loans, and hence based on my discussions with some of these, they are trying to target some of the zip codes where you excel in, and hence the question.

There's nothing significant that we have seen or any new activity that we have seen as of now.

Got it. No worries.

Thank you so much.

Thanks for taking my question. One was with respect to ticket size of the loans.

This quarter around, we are seeing higher growth coming in from the high-ticket-size loans, from 15 to 20 lakhs and 20 to 25 lakh ticket size. What's the outlook there?

Assume that if this run rate continues, will it exert some pressure on the margin side? Because I assumed that even in the high-ticket-size loans, competition is relatively higher and so the margin pressure too.

What is the outlook there?

As we have been saying since last couple of years, the customer segment, the same customer who used to purchase a smaller house or a lower-ticket-size property earlier is migrating upwards. His or her challenges continue to remain the same in terms of the difficulty in getting loans from the larger lenders.

We are not targeting a more premium customer as such. It's the same customer we are targeting.

It's just that their requirements have gone up. The price of the house has gone up.

Which is why you're not seeing, if you look at, there has been an increase in the ticket size, but you're not seeing such an impact on the yield. We are still reporting origination yields of 13%, and that is largely also because of the drop in borrowing cost.

Adjusted for borrowing cost, there is actually no decline in yields at all. The reason is that we are addressing the same customer, and the customer is willing to pay that premium to us for us to solve his problem.

Five years down the line, we will be probably talking about a 40 lakh ticket size. The customer segment is going to remain the same, their challenges are going to remain the same, and obviously, then the yields will also be the same.

Okay. Fine.

Second thing is on the fact that over the last 3 months, we have seen interest rates hardening. Do you foresee, although your incremental cost of borrowing has come down, and your guidance sustains 5% to 5.25% margins, do you feel this might continue in FY '27 as well, given the interest rates have hardened in Q4, fourth quarter?

Let me take it in two parts. Quarter one, we have enough visibility to ensure that the cost of borrowing is by and large in the same range.

For the rest of the year, we will have to see how the actual pricing moves in the market, and based on that, we will have to reprice the customers or not reprice. That decision is not available today.

We are very confident of maintaining the spread above 5%, which is in our guided range of 5% to 5.25%.

Okay. Thank you.

Thanks so much.

Thank you.

Thanks for taking my question. Just wanted to understand how you are seeing asset quality on the ground in the month of April, and what is your assessment for the year?

Also, what your guidance is on the credit cost side? Lastly, one specific question around the collections.

Peers have been highlighting some collection issues in the state of Karnataka. Just wanted to get your assessment of the thing.

Those are my questions.

Asset quality wise, as I mentioned, April experience has been good and it's been better than last two years, gives us a lot of, it's a, gives us a lot of confidence in terms of how it's going to pan out rest of the year, because if you remember last year, April, was much worse than, March. This year, we have not seen that.

It's been much better than last two years. Overall, for the coming year, we feel that, if if this is a kind of indicator, it should be it should be good.

The credit quality experience should be good for this year. Same for Karnataka.

We are not here We don't have any issues on, as far as Karnataka is concerned. Generally, our portfolio quality has been extremely good there, and we're not seeing anything on the ground.

Thanks for that. Just a guidance on credit cost for the next year.

Credit cost is the same. The same guidance, 30 to 40 basis points.

Got it. Those are my questions.

Thank you.

Thank you, sir, for the opportunity.

Hello, hello.

Am I audible now?

Okay. Thank you for opportunity for the question.

I had one quick question on that what has changed on the sourcing strategy from Pune and Mumbai specific, as that has been higher in the cities? Do you plan to replicate in some of the other markets like Delhi, Bangalore,

Hyderabad? Bombay, Pune are more formal apartment markets where the sourcing largely comes from the developers who are building housing projects.

We have developed a good strategy to kind of tap into that market and get leads from there. We already had a good similar sourcing structure in places like Ahmedabad, Surat, etc., which are large developer-led markets.

We've managed to replicate that well in a place like Bombay and Pune, which used to be the banks used to be much stronger in these markets. We have been able to kind of penetrate that.

That is the main difference in the sourcing strategy.

Okay. Thank you.

Can we have some more color on how builder market has always been there in Bombay, and Bombay has been performing as a good market since I think many quarters, in recent quarters, right? What is the shift that happened during the quarter is somewhat if we can get some more color on that?

No, not specifically with respect to the previous quarter. The Bombay, Pune transition has been taking place over the last almost 18 to 20 18 to 24 months.

It's just that it's become much larger now. We started this transformation about 24 months ago and entering to the developer segment and sourcing customers from there.

It's just that it has become much larger now and it's really taking off. Last quarter we had a good quarter.

It is not that it started last quarter. This transformation started sometime ago.

Okay. Do we plan to replicate this in Bangalore, Delhi, Hyderabad?

Are we going to see higher flows from the bigger cities?

Sorry, can you just repeat that?

Do we plan to replicate this in Bangalore, Delhi, Hyderabad? Are we going to see higher flows from the bigger cities?

Yes, to some extent. If you compare Bombay and Pune with, say, the other cities that you are talking about, those are more individual housing markets as far as affordable housing is concerned.

Yes, some part of our Bombay strategy will be replicated in those markets.

Sir. Lastly, is it fair to assume that the co-lending and DA book is largely the high-ticket AUM that we have?

Large part of it is, yes. Co-lending is largely 20 20 lakh plus.

So 20 to 40 lakhs is where we do co-lending. Large part of the higher ticket is co-lending.

Got it. Thank you so much.

Hi. Am I audible?

Yes, Suraj.

Yeah. Hi.

Thanks, ma'am. Two questions.

First, if I look at the number of employees per branch, it has steadily increased, let us say from 9 in FY '23 to almost 11 now. Do you believe further strengthening of the manpower will be required given probably the higher attrition in the sector and also the competitive intensity in the sector?

This number can go up further? What is your opinion on that?

That is point one. Second question, ma'am, on this origination yield, looking beyond the quarterly movements, you had taken 35 basis point PLR increase in FY '25.

Yet still the yields remained broadly flat on FY '25 versus FY '24 if I look at your presentation despite a higher LAP mix.

Now

over the past few quarters, the origination yields are coming down, and then you have also taken a PLR cut. Over the, let us say, next couple of years, do you think yield could remain under pressure given the competitive intensity to sustain growth?

Okay. On the first question, as far as the number of employees per branch are concerned, there will be some fluctuation.

For example, if we add another, let's say, 30 branches next year, that number will maybe come down for a couple of quarters and then again pick up. Broadly, it will be in that 9 to 10, 11 11 range.

It's not going to substantially jump up. It will only gradually move up as the company scales up.

Maybe 2 to 3 years down the line, that number can be a higher number. Otherwise, broadly, it will be range-bound in that 9 to 10, 9 to 9 to 12 number.

As far as the yields are concerned, want to just draw your attention to the spread. We have been able to maintain the spread.

If you see last 3, 4 quarters, 5.2, 5.3 that we have been talking about, we have been able to maintain the spreads. That is the number that we are trying to anchor to.

If the borrowing cost reduces, then we will pass on some of that to customers, and the yield reduces. We are still able to maintain the spread.

Our increase in the LAP ratio is not very substantial. We have always been in that 14%, 15% range.

It's just maybe a 1% increase, which does not move the needle much. Broadly, we are operating in that 5% spread, 5% to 5.2% spread, kind of a construct.

Depending upon whatever the borrowing cost is at that point of time, and we run a fully floating rate book, we will ensure that we maintain that 5 to 5.20 spread. We either pass on the benefit to the customer, or if there is an increase, then we kind of pass that increase to the customer.

Suraj, just one additional point. You referred to FY '24 versus '20 FY '25.

Now what we had done essentially was we were looking forward to the cost of borrowing hike that was coming our way, and we had led with a price increase at that point of time, which led to a slightly higher spread. Even if we go back in that year, our guidance has always remained of spread in 5 to 5.25.

We enjoyed a higher spread for a shorter period, and in our conversations, we've always been guiding to this product mix that we broadly now, and we will stick to our spread guidance for some time to come.

Okay. Sure, ma'am.

Thanks a lot. That's it from my side.

Actually, yeah, thank you so much for the opportunity. My question was on the similar lines of Suraj.

Do we really see a need to cut PLR further at least in the shorter term? If the borrowing rates or especially the incremental borrowing rates are broadly stable vis-a-vis the book?

Not at the moment. We've already done with a 10 basis in the month of January, we will want to stay put for now.

This PLR cut, is it effective for the entire book or does it happen over somewhat time, somewhat quarters?

PLR cut has to get transmitted to the entire book.

Yeah. Sir.

Thank you.

Hi. Thanks for taking my question.

If I look at the AUM growth trajectory, we've come down from around 30% to around 25-odd percent. What gives us conviction and confidence that you sustain this trajectory?

Are we kind of actively going to shift into segments, or is it the same segment that we pursue? Are there liability side tailwinds?

What is it that gives you this conviction that this 25 will kind of remain here and not further taper down?

One is that the, you can say, organizational distribution strength that we have built in terms of our connector network, our branches distribution, RMs, etc., that we have across the country. Last year for a couple of quarters, we were still in the process of rebuilding that.

Now we have completed that process. Our delivery of last two quarters gives us the confidence that yes, this is a good formula to kind of use or keep kind of building on.

That is what gives us the confidence that we should be able to do this 25% growth. As far as FY '27 is concerned, our exit momentum, our, let us say, continued dispersal in April, so that's what gives us the confidence to kind of project that number for FY '27.

Beyond that, hopefully whatever good work we do this year in terms of building a distribution and team, etc., should help us to keep going with the same momentum for the next couple of years.

Let me be a little more specific. See, if I look at your loan book growth in the last one year and loan growth accretion, almost a third of the incremental loan growth comes in from ticket size above 25 lakhs.

I believe you do get, I think you rightly mentioned that loans about 20 lakhs are sort of largely kind of co-originated. How much is the funding cost differential between your balance sheet borrowings and co-lending or basically co-lending on co-lending, and yield differential above 25 lakhs?

Is this really the way forward in terms of we kind of slowly reducing the gap between us and maybe the target segment of larger housing finance companies?

Co-lending is one way to bridge that gap, and we are using it more as a productivity enhancement tool. When our distribution comes across a customer who's, let's say, a formal customer and who can get a loan from a bank, we push it through the co-lending channel.

In the normal course, we are sourcing customers who are from the informal segment, and that gets booked as a normal regular Home First customer. It's just a way to kind of increase the target market, offer a, you can say, better proposition to our channels, and increase the productivity of the team.

That is the strategy behind co-lending. Having said that, at the moment it is only about 4% of our AUM and about maybe 10% of our 10% of our origination.

A good part of the 20 lakh plus is also coming as regular customers, where there is a, you can say, increase in ticket size. Same customer segment who are from the informal segment but who want a larger ticket size, that also forms a part of the 20 lakh plus cohort.

How much is the difference in cost of funding between co-lending and balance sheet borrowings?

Very similar, Nischint. It depends from bank to bank, but the range will be less than 20 basis points.

How much is the catch-up between you and let's say the larger housing finance, the AAA-rated housing finance companies in cost of funding?

Cost of funding will be 40 basis points, 40 at best 50, not more than that.

Just as these companies have a strategy of kind of having a small affordable housing book, you can probably also have a strategy of having a small prime book.

No, I think I want to come in here and address. It's not prime.

The customer segment is the same. There is inflation, which is causing the ticket size to rise.

There is lack of documentation in this borrower segment. Otherwise, they wouldn't have been able to deliver this yields.

We are not targeting a prime book. I think it's very important to differentiate the segment.

The prime customer, Nischint, would seek a rate in today's market as you would seek a rate between 7%, 7.25% to 8%, right? He is not going to pay a penny above 8% today.

That is not the customer we are targeting. We cannot offer 8% even in co-lending.

What we're offering in co-lending is anywhere between 8% to 10%. These are customers who are, like I said, customers who have some formal source of income, etc., but who are willing to pay us that premium.

That is the co-lending portion. Then in the same cohort, we have customers who are affordable housing customers who have informal incomes, etc., and who are willing to pay us the rate which is, say 12.5% or 13%.

Earlier, the ticket size used to be lower. They would have bought a smaller house, but now they are going for a larger house, their incomes have gone up, and hence they are looking to take a larger ticket housing loan.

That's the only difference. Sure.

Just one last one. In markets like Mumbai and Delhi, the properties would be similar to that of the prime segment, but just that the customer segment would be different, or are we Yes, absolutely.

Yes,

absolutely right. Properties, yes.

Absolutely right. If you see Bombay and Pune, as I was mentioning, always a mainstay of large banks.

These are all projects which are all RERA-approved projects. Most of the banks operate in these projects.

They would take away 90% of the customers who have formal incomes and documentation and so on. There is always 10 customers who are left who have informal incomes, who struggle to get loans from the banks, but they are purchasing properties in the same projects.

These are all from the deep suburbs, right? We are talking about Kalyan, Ambernath, Badlapur, Palghar, these kind of places.

Got it. Thank you very much for answering all the questions, and all the best.

Thank you.

Hi, good evening. Thank you for the opportunity.

Sir, just wanted to understand this growth that we are forecasting, what proportion would come from home loans and what proportion would be from LAP? How do we think of the demand with the West Asia crisis?

Is it going to have a dip in terms of the down payment capabilities? Any kind of uptick that we are seeing in demand maybe because of the PMAY or is it a very stringent PMAY this time round?

Just wanted to pick your brains on these upticks. Thanks.

Yeah.

Our mix is likely to remain the same. We are looking at somewhere between 15% to 20% loan against property.

We are somewhere in the middle of that, 16% or 17%. The ratio of housing to LAP will broadly remain in the same ballpark, which is about 80/20, 80% housing and 20% loan against property.

That will be the mix. As far as the West Asia crisis is concerned, at the moment we are not seeing any impact on the demand.

Hopefully it should be behind us soon, and things will move ahead. As of now, we are not seeing any drop in demand.

April has also been fairly good. On

PMAY, CLSS 2, is it a more stringent policy than the previous one? Are we seeing any kind of throughput increase because of that?

Yes, it has a slightly more elaborate process. I think some of the teething issues are getting addressed, and we should see a good traction this year in terms of transmitting the benefit to more number of customers.

In terms of generating new demand, it probably does not have that kind of impact, but maybe gradually it will pick up. As more customers get the benefit of the scheme, it will kind of pull in more customers.

Got it. Just one last question in terms of data keeping, what is the differential between the home loan and the LAP product at a blended level?

The yield difference? 150 basis points.

Yield difference, 100

to 150 basis points.

This would be same on an APR basis also?

Yes, because, for us, more or less the APR and the rate that we are charging, it's a reducing balance rate that we are charging. The APR is almost same as the interest rate which is charged.

Because APR calculation also takes into account the fee income. Sometimes the fee income in LAP is slightly higher.

Very minimal, right? Those are very minimal, so that's why I said It doesn't move the needle that much.

It would be a 10 basis points difference.

Understood. Thank you so much.

These were my questions. Thanks.

Thank you to give me the opportunity. Sir, how much write-off bad debts from profit and loss account this year, and how many units we auctioned?

27 crores.

The total write-offs this year has been about 36 crores.

Okay. You think this amount is extraordinary high?

The scale of the business is growing, it's more or less in line with the growth in the business.

How many units we auctioned?

Sir, we auction anywhere between 50 to 100 units a month, for the year it will be around 1,000 units.

Okay. Sir, AUM growth we achieved between March '23 to March '26 is 30% CAGR.

Same growth can we expect from next 3 years?

We have guided to a 25% growth, sir. Ha,

that I have listened. It can be 30% not possible in current circumstances?

At this point, difficult to say, sir.

Okay. Thank you very much, and all the best.

Thank you.

Yeah. Hi, sir.

Sir, just one question on the connectors point. I think there are many players saying that the connector fee is increasing for them.

Just wanted to know, have there been any higher demand from their side even in your case, and if you can highlight how the connector fees has moved since last few years, and maybe how it should trend going forward?

This is a ongoing negotiation with the connectors. Any connector in whatever fee structure he is at, if you go and ask him, he is going to always want a higher fee.

That is a constant negotiation with them. How we normally address that is by also addressing other issues which the connectors have, which is timely payouts, a wider bouquet of products, faster turnaround.

Faster turnaround to some extent compensates for the higher fees. Because if they are able to turn around one more case or two more loans in a particular month, that more than compensates for the higher commission that they would be probably earning with somebody else.

That is how we kind of address the commission issue. If there are specific tactical moves that we need to make in a particular market, we do that.

In a particular location, particular connector, we need to increase the fees, we do that. On an overall basis, I would say probably you would have seen probably a 10 basis points movement in the 10 to 15 basis points movement in the commissions.

Sir. Basically, it varies across the connectors and across the geographies?

Yes, varies across connectors and geographies, and we also kind of plan it depending upon the connectors' throughput, the quality of files, and various other metrics that we track the connectors on.

Sir. Thank you.

That was my only question.

Hello. Am I audible?

Yes, Aditya.

Yeah. Thank you so much for the opportunity.

Great set of results, and really commendable performance on the asset quality. Just wanted to quickly understand what is the issue with the Tamil Nadu and Telangana?

Is it just human capital issue or is it something else that you are seeing on the ground?

No, as we had mentioned, it is largely to do with internal teams and building the teams. Now those things are behind us, and we should have a good year as far as Tamil Nadu and Telangana are concerned.

Understood. The other question is on strategy.

In your opening remark, you had said that you have successfully implemented agentic AI and some piece of work has been already automated. Will it increase our productivity in terms of growth or will it increase our productivity in terms of opex cost?

As of now, we can more confidently predict the outcomes on the cost side. It is a little more difficult to predict what kind of outcomes it will have on the origination side.

Eventually, it should have origination outcomes as well. On cost side, definitely, yes, there will be a strong outcome because of implementation of AI, because of higher productivity.

As far as new originations, etc., are concerned, there are some pilots going on. It could be a more gradual impact over there.

The outcome that we are looking for there is the ability for us to capture loans which may be otherwise getting declined on the ground proactively. That is something that is going on.

If it is successful, of course, it should help us to improve originations, but it's difficult to predict at this point.

Understood. That's all from my side, wishing you and the entire team all the very best.

Thank you.

Thank you, Aditya.

Thank you.

Thank you, everyone, for joining us today and for your continued interest in Home First. We hope we were able to address your questions satisfactorily.

For any further queries, please feel free to reach out to Sunil Anjana or write to us on [email protected]. Thank you.