Neutral Can Fin Homes; target of Rs 960: Motilal Oswal

Motilal Oswal recommended Neutral rating on Can Fin Homes with a target price of Rs 960 in its research report dated October 23, 2024.

Broker Research

October 24, 2024 / 19:34 IST

Neutral

26 Aug, 2025 12:21

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Motilal Oswal's research report on Can Fin Homes

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). PAT grew ~20% YoY in 1HFY25, and we expect PAT to grow ~11% YoY in 2HFY25. Opex was up ~13% YoY to INR594m. The cost-income ratio stood at ~17%. (PQ: 15%, PY: 16%). 2QFY25 RoA/RoE stood at ~2.3%/~18%.Management guided a loan growth of ~13-14% in FY25 and 15-17% in FY26 and it is confident of achieving disbursements of ~INR100b in FY25. CANF is targeting ~15 new branches this year, which will be in northern and western India. It will be looking to deepen its presence in Tier 2 towns.

Outlook

CANF has successfully demonstrated its ability to maintain its pristine asset quality for several years, and we expect the same to continue. However, CANF will have to accelerate its disbursements over the next few quarters to deliver on its guided loan growth. We estimate a CAGR of 12%/12%/14% in NII/PPOP/ PAT over FY24-27, with an RoA of 2.1% and RoE of ~17% in FY27. Reiterate Neutral with a TP of INR960 (premised on 2.0x Sep’26E P/BV).

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