Stock in focus: How far will Home First rally?

Home First Finance Company India Limited is an India-based housing finance company.

The company is a technology-driven lender that provides loans to customers from low and middle-income groups. It is a midcap company with a market cap of Rs 7,140 crore. The company has strong financials and has reported higher than industry average revenue growth and industry average net income over the period of five years. The strong business practices attract investors, and it is evident from the stock price.

The stock debuted on the exchange in the month of February and it was listed at Rs 618 which is about 100 points above the IPO price. That is about a 19% listing gain. The stock received a bumper listing and thereafter it has gone from strength to strength and now has reached the level of Rs 843. That is about 62% gain from its issue price. In the last three months, the stock has delivered 45.41% returns, among which 15.26% returns were recorded last month alone. This shows that the stock is going strong since its listing. Interestingly, the majority of the stake is being held by foreign investors (49.25%) and the promoters hold 33.65%. The rest is being held by the retail portion.

It has been observed that the stock is trading above its 20-DMA since September 23. This proves its short-term bullishness. The RSI is at 67 and rising. It is forming a 6-day cup pattern and any closing above Rs 857 would mean that the stock has the potential to scale newer highs. The ADX line is rising which tells that the uptrend is going strong. Rising volumes have been recorded since the last few trading sessions. The price action, combined with volume, indicates that market participants are interested in this stock and more trading activity is expected in the coming days.

With all the technical parameters showing signs of bullishness, the stock is expected to trade higher in the short to medium term.