Hefty growth in the loan book at 28.8% in the last quarter has allowed Can Fin to prove its consistency in this fiendishly difficult housing finance industry. The alacrity in the loan book is galvanized by the housing loans to the non-salaried class which grew by 90.5% last quarter. The overall non-salaried book grew by a strong 65.5% in Q3FY17 which increased its share to 23% of the total book from 17.8% in Q3FY16.
Notwithstanding robust business growth, current stock valuation barely favors the conservative. Yet earning revisions (FY18 EPS increased by 14.7%) stems from its ability to voluminously disburse credit to the steadiest salaried class (23.3% in FY16, 20.3% in 9mFY17). Weighing odds, we revise our rating to “accumulate” with a target of Rs 1920 (previous target Rs 1488) based on 4x FY18e BV for a period of 6-9 months; EPS estimated to grow by 40.3% (annual) over the next two years.
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