Can Fin Homes Ltd. share price target

CANF saw a stable quarter as disbursals were in-line leading to AUM growth of 9.0% YoY, while NII was a beat at 3.7% due to lower cost of funds. Despite repo cut of 100bps, company expects NIM of 3.5% in FY26 (3.6% in FY25) as (1) certain portions of bank and NHB borrowings would be repriced lower due to their floating nature and (2) only 5% loans shifted from annual to quarterly reset (67% still at annual reset). Hence, we raise FY26E NIM by 9bps to 3.46%. While both Karnataka and Telangana are stabilizing in business terms, recovery has been slower due to state-specific issues. Disbursal and loan...

We maintain our BUY recommendation on the stock

Can Fin Homes’ (CANF) PAT for 1QFY26 grew ~12% YoY to ~INR2.24b (in line). NII grew 13% YoY to ~INR3.6b (in line). Fees and other income stood at ~INR93m (PY: INR70m) for the quarter.

Net earnings slightly beat estimates by 3.6% to Rs. 234 crore in Q4FY2025. NII was slightly below estimates by 0.8% (up 6.3% y-o-y and 1.1% q-o-q) at Rs. 349 crore due to a higher cost of borrowings.

We maintain our BUY recommendation on the stock

Can Fin Homes (CANF)’s 4QFY25 PAT grew ~12% YoY to ~INR2.3b (in line). FY25 PAT grew ~14% YoY to INR8.6b. 4Q NII grew ~6% YoY to ~INR3.5b (in line). Fees and other income stood at ~INR168m (PY: INR159m).

In our interaction with the management, it reiterated its disbursement/AUM growth target for FY26E. It expects AUM growth to improve to ~15% for FY2026E (vs sub ~10% for FY25E) despite challenges in its key market Karnataka & Telangana.

Operational metrics weaken, growth in disbursement lags

We maintain our BUY recommendation on the stock

Can Fin Homes (CANF)’s 3QFY25 PAT grew ~6% YoY to ~INR2.1b (in line). NII rose 5% YoY to ~INR3.4b (in line). Other income was ~INR58m (PQ: INR74m) because of lower disbursements, translating into a lower fee income.

Can Fin Homes’ NII was slightly below estimates by 1.8% (up 4.8% y-oy and 1.5% q-o-q) at Rs. 345 crore in Q3FY2025 due to higher cost of funds. NIM stood at 3.71% (as a percentage of AUM), 4 bps below estimates (lower by 15 bps y-o-y).

Earnings growth would improve as AUM growth improves in the coming years as the most internal IT/systems and processes have been streamlined in FY2024. Focus is now on accelerating growth with enhanced centralised due diligence.

Can Fin Homes reported a strong performance in Q2FY2025. Earnings were in line with estimates, mainly led by lower-than-expected credit cost and improvement in NIM.

We maintain our BUY recommendation on the stock

Operational metrics remain strong; disbursement growth picks-up

Can Fin Homes (CANF)’s 2QFY25 PAT grew ~34% YoY to ~INR2.1b (in line). Base quarter had one-off credit costs because of the Ambala incident. NII grew 7% YoY to ~INR3.4b (in line), and other income stood at ~INR74m (PQ: INR70m).