Top Market Picks for the Week: Why Analysts Are Bullish on Home First Finance and Kaynes Technology

Market Outlook for the Week of June 16

As India’s equity markets prepare for the trading week starting June 16, investors are navigating a landscape shaped by recent volatility, foreign institutional investment shifts, and sector-specific recovery patterns. Among the noise, analysts are drawing attention to two standout picks: Home First Finance Company India Ltd and Kaynes Technology India Ltd. These stocks are not only backed by strong fundamentals but are also well-positioned to benefit from broader economic trends and sectoral tailwinds.

Home First Finance: A Strong Bet in the Affordable Housing Space

Home First Finance has emerged as a key player in India's rapidly growing affordable housing finance sector. Specializing in home loans for first-time buyers in tier-2 and tier-3 cities, the company has reported consistent earnings growth and healthy asset quality.

Key Metrics Driving Analyst Confidence:

• Q4 FY24 Net Profit surged 29% YoY, with a sharp reduction in gross NPAs.

• The Net Interest Margin (NIM) remains stable at 6.3%, indicating sound lending practices.

• Management guided for 20–25% AUM growth in FY25, primarily led by expanding loan demand in urbanizing areas.

Brokerages like Motilal Oswal have placed Home First Finance in their "high conviction" list for the current quarter, citing improving return ratios and solid underwriting standards. The stock is trading at a forward P/E multiple of ~25x, which analysts believe is attractive given the company’s long-term growth potential and prudent risk management.

According to ICICI Direct’s report, a steady disbursal pipeline and a well-capitalized balance sheet make Home First an attractive play in the NBFC space.

Kaynes Technology: Riding the Electronics Manufacturing Wave

Kaynes Technology, a prominent electronics manufacturing services (EMS) provider, is becoming a key beneficiary of the Make in India push and the broader global shift toward localized supply chains. With diversified capabilities across automotive, medical devices, industrial automation, and defense electronics, the company is experiencing robust order inflows.

What Sets Kaynes Apart:

• FY24 revenue jumped 53% YoY, driven by a strong uptick in export orders and government contracts.

• Their new PCB assembly facility in Telangana is set to double capacity by Q3 FY25.

• Debt-to-equity ratio remains under 0.4x, underscoring a healthy financial profile.

Axis Securities projects continued momentum as Kaynes expands into higher-margin ODM segments and leverages the PLI scheme for electronics manufacturing. The company has already secured multi-year contracts from global automotive players, further cementing its leadership.

A recent report by JM Financial notes that Kaynes’ growing role in India's defense and aerospace manufacturing ecosystem could unlock significant upside in the next 12–18 months.

Comparative Snapshot

Risk Factors to Watch

While both stocks show promise, investors should remain cautious about macroeconomic variables:

• Interest Rate Sensitivity: Rising rates may affect borrowing demand for Home First Finance.

• Input Costs & Global Supply Chains: Kaynes remains exposed to fluctuations in semiconductor availability and pricing.

Both companies, however, are navigating these challenges effectively through diversification and forward planning.

Final Word: Growth Stocks Worth Watching

With strong earnings momentum, sectoral tailwinds, and increasing institutional interest, Home First Finance and Kaynes Technology stand out as top Indian market picks for the week beginning June 16. Long-term investors looking for high-growth, well-managed companies may find both stocks worthy additions to their watchlists or portfolios.

For detailed financials and historical trends, refer to their profiles on Moneycontrol, Screener.in, and NSE India.