Star Housing Finance reports robust growth in loan book and profitability for 9M FY2025

Star Housing Finance Limited (Star HFL), a publicly traded company on the BSE, has reported substantial financial and operational growth for the nine months ending December 31, 2024. The company, which focuses on retail home finance, has demonstrated remarkable resilience in a competitive housing finance market, bolstered by strong disbursements, improved interest margins, and consistent asset quality.

With an aggressive expansion strategy and a commitment to loan book growth, Star HFL has significantly scaled its operations while maintaining a disciplined approach to risk management. As liquidity conditions in capital and debt markets evolve, the company remains focused on sustainable growth by balancing asset quality improvement with continued business expansion.

What Are the Key Financial Highlights of Star Housing Finance Limited’s Performance?

Star HFL has reported a 45.94% year-over-year (YoY) increase in assets under management (AUM), reaching ₹538.06 crore. This growth reflects the company’s ability to efficiently expand its loan portfolio while catering to affordable housing customers. Loan disbursements for the quarter stood at ₹143.98 crore, showcasing strong demand in the retail home finance sector.

Interest income surged by 57.46% YoY, driven by the rapid pace of disbursements and the expansion of the company’s loan book. The net interest margin (NIM) stood at 7.88%, highlighting effective interest rate management and cost efficiencies.

On the profitability front, Star HFL’s profit before tax (PBT) registered a 40.95% increase YoY, while profit after tax (PAT) rose by 32.25%, reflecting strong financial fundamentals and disciplined cost controls.

How Has Star Housing Finance Limited Maintained Asset Quality While Growing Its Loan Book?

As loan book growth accelerates, maintaining asset quality improvement has been a key focus for Star HFL. The company’s portfolio at risk (PAR) stood at 4.65%, with gross non-performing assets (GNPA) at 1.74% and net non-performing assets (NNPA) at 1.25%. This stability in asset quality underscores Star HFL’s ability to manage risk effectively while expanding its retail home finance portfolio.

Despite industry-wide concerns about rising credit risks in the housing finance sector, Star HFL has demonstrated strong underwriting practices. The company continues to implement prudent risk assessment measures to maintain a healthy balance sheet and avoid excessive exposure to high-risk borrowers.

How Is Star Housing Finance Limited Strengthening Its Financial Position?

To support loan book growth, Star HFL has successfully raised ₹141.60 crore in incremental liabilities from five financial institutions. This capital infusion ensures that the company maintains ample liquidity to fund future disbursements.

The company’s borrowing outstanding increased by 49.78% YoY, reaching ₹399.14 crore, which reflects its expanding financial base and enhanced market positioning. With a leverage ratio of 2.81x, Star HFL has maintained a strong capital structure while ensuring that its expansion remains well-funded.

Additionally, the company’s return on equity (ROE) improved to 7.88%, reinforcing its ability to generate shareholder value while pursuing aggressive growth in the retail home finance segment.

What Is Star Housing Finance Limited’s Strategic Outlook for the Future?

Commenting on the financial performance, Kalpesh Dave, Director & CEO of Star HFL, emphasized that the company’s growth trajectory will depend on liquidity conditions in capital and debt markets. He stated that the focus will remain on maintaining asset quality improvement while ensuring sufficient liquidity to support AUM expansion.

Star HFL operates in multiple states, including Maharashtra, Madhya Pradesh, Gujarat, Rajasthan, the National Capital Region (NCR), and Tamil Nadu. As a registered Primary Lending Institution (PLI) under the Pradhan Mantri Awas Yojana (PMAY), the company plays a key role in facilitating housing finance for economically weaker sections and lower-income groups.

The company’s expansion strategy includes broadening its geographic footprint while leveraging technology to improve loan processing efficiencies. By maintaining a customer-centric approach, Star HFL aims to enhance financial inclusion in the affordable housing sector while delivering strong returns to stakeholders.

Why Is Star Housing Finance Limited Poised for Continued Growth?

The strong financial performance of Star HFL underscores its ability to navigate a dynamic market environment while delivering consistent growth in retail home finance. With a clear focus on loan book growth, risk management, and operational efficiency, the company is well-positioned to capitalize on emerging opportunities in India’s housing finance sector.

As demand for affordable housing continues to rise, Star HFL’s ability to balance asset quality improvement with robust expansion will be critical to sustaining long-term success. With a solid financial foundation and a strategic approach to capital deployment, the company is set to remain a key player in the affordable housing finance space.