Investor Presentaiton

8 furtisments HELYEL Home First Finance Company India Ltd. HDFC securities Click. Invest. Grow. YEARS structural transformation in housing demand. This is because of a combination of first-time homebuyers, and customers moving up the property ladder to shift to larger homes or acquiring a second home in another location, that is at play. The pandemic was in fact the blessing in disguise for real estate, helping the industry establish its importance in the residential segment. Especially the millennial, who were earlier in favour of the rented house, have started showing great interest in buying their own home. As mobility was restricted to the house, people started searching for homes that accommodated entertainment, exercise and recreational area. HFFC being an aggressive player with stringent asset management practices remains in a sweet spot to ride the expected growth. Risks & Concerns Prolonged economic slowdown The possibility of third wave and fresh lock downs could hurt the business on multiple fronts i.e. liquidity, asset quality, loan growth, collections etc. However, the company has 60% of the outstanding loan book coming from salaried segment and 70% of customers have credit history. Competition In the Covid-19 era of challenging time the banks and several other financial institutions have refrained from lending to the more risky segments such as unsecured consumer loans, SMEs, and vehicle finance. Banks have started focusing on mortgage business due to lack of other opportunities. This has created high competition in the housing finance segment. Some of the competitors like Canfin homes have taken price action. If this level of severity in competition continues, there could be impact on profitability of the company and fear of losing market share also remains high. However, due to niche focus of HFFC the severity is less. A lot of fintechs are emerging, and in next few years they would probably enable themselves in delivering faster disbursement, automated sanction or automated disbursement. This risk factor is also emerging in the NBFC segment. Geographic concentration The business is highly concentrated in the top four states, and now spreading its presence in the rest part of the country. Any political and economic uncertainty in that region could impact the business. Even entry to newer geographies presents the risk on asset quality, as they are less discovered and the company does not have much history about the behavior of customers in those regions. Ownership Structure High ownership of private equity player and low float for the shareholders other than promoters / institutions could hurt the stock price in the case of exit by any of the large institutional holder. Any sustained offloading by the institutions could result in higher float and de- CRETAIRES RETAILRESEARCH

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