Buy Can Fin Homes; target of Rs 850: Mirae Asset Sharekhan

Mirae Asset Sharekhan's research report on Can Fin Homes

NIM rose 13 bps y-o-y and 10 bps q-o-q at 3.74% (as a percentage of AUM) due to a rise in yields and a lower cost of funds. NIM guidance for FY26 stands at 3.5% on lower cost of funds. Credit cost rose 11 bps y-o-y to 0.27% (as a percentage of AUM) as asset quality weakened. In FY26, asset quality is expected to improve hence lower credit costs from current level. AUM grew by 9.0%/1.5% (y-o-y/q-o-q). Disbursements were weak due to continued state-specific challenges.

Outlook

However, disbursements are likely to be over 20% in FY26, leading to a 12-13% AUM growth. At CMP, the stock trades at 1.7x/1.5x its FY2026E/FY2027 BV. We maintain buy rating with an unchanged PT of Rs. 850 on the back of improving growth outlook and reasonable valuation.