Geojit Research is bullish on Can Fin Homes has recommended buy rating on the stock with a target price of Rs 3060 in its research report dated October 10, 2017.
Geojit Research's research report on Can Fin Homes
Focused approach along with implementation of well-defined strategies has helped CFHL to report robust CAGR of 38% and 40% in loan book and net profit, respectively over FY12-17. • Going ahead, initiatives by the government like “Housing for all by 2022” and incentive like credit linked subsidy scheme will drive the business growth for all HFCs and CFHL is well placed to exploit this growth opportunity. • We expect NII and PAT to grow at a robust pace of 25% and 30% CAGR, respectively over FY17-19E led by strong loan growth (25% CAGR) along with stable asset quality.
Given the strong growth rate, unparalleled asset quality (Gross/Net NPA at 0.2%/0.0% as of FY17) and superior return ratios, CFHL will continue to command premium valuation within the HFC space. We initiate coverage on CFHL with a BUY rating and assign TP of Rs3,060 (P/ABV of 4.0x for FY19E).
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