Can Fin Homes Ltd. (CANF) is the housing finance arm of Canara Bank. Predominantly active in South India, it targets Tier 1 and Tier 2 cities. The company offers a range of financial products, including housing loans, composite loans, non-housing loans, mortgage loans, and commercial property loans, in addition to fixed and cumulative deposits. The loan book grew by 11%YoY and 3% sequentially to Rs.34,999cr. The client base now stands at Rs. 2.53 lakh. Disbursements grew by 23.1%QoQ but declined by 8.8%YoY. Net Interest Income marginally decreased sequentially but expanded by 25.5%YoY. The sequential decrease in NII growth was attributed to margin pressure. The management anticipates achieving a disbursal of Rs. 11,000cr by the end of FY25, driven by the addition of customers from new channels, including developer tie-ups.
OutlookThe Net Interest Margin (NIM) is expected to remain at ~3.6%, supported by completed repricing activities and a favourable credit rating adjustment by ICRA, which should alleviate pressure on the cost of funds. We assign Buy rating on the stock with a target price of Rs. 900 based on 2x FY26E BVPS.
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