Buy Can Fin Homes; target of Rs 860: Prabhudas Lilladher

Prabhudas Lilladher is bullish on Can Fin Homes has recommended buy rating on the stock with a target price of Rs 860 in its research report dated January 21, 2025.

Broker Research

January 21, 2025 / 10:55 IST

buy

26 Aug, 2025 12:21

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Prabhudas Lilladher's research report on Can Fin Homes

CANF saw a weak quarter since loan growth was lower while asset quality saw a blip. Credit growth was 9.1% YoY (PLe 10.9%) as disbursals were affected and dipped by 21% QoQ as state specific issues in Karnataka and Telangana marred credit flow. These 2 states contribute 48% to overall disbursals. The company is targeting credit growth of 15% YoY in FY26E which may be challenging given (1) demand recovery in abovementioned states could be protracted and (2) LOS/LMS implementation may impact disbursals. Hence, we cut loan growth for FY25/26/27E by 4%/3%/2% to 9%/11%/12% YoY. There is upside risk to loan growth due to renewal of CLSS. Asset quality has been worsening since Q4FY24 since the overdue portfolio has been increasing owing to new RBI circular disallowing adjustment of customer advances against EMIs. While stock is valued at 1.6/1.4x on FY26/27E ABV, underperformance on growth and asset quality are key concerns.

Outlook

We cut multiple to 1.8x from 2.1x on Sep’26 ABV and trim TP to Rs860 from Rs1,000 but retain ‘BUY’ due to favorable valuations.

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