Buy Can Fin Homes; target of Rs 950: Prabhudas Lilladher

Prabhudas Lilladher's research report on Can Fin Homes

CANF saw a good quarter with PAT beat of 15.6% driven by higher NII/NIM and much lower credit costs. Company is delivering better margins consistently as bulk (~60%) of the loan book is still at annual reset while Banks+NHB that form 71% of borrowings and are mainly floating in nature, have benefitted from repo cut of 100bps. Funding cost may not further fall except for NHB sanctions. NIM is guided at 3.75% as it gives leeway to offer competitive rates to push business in Q4. SENP stress declined, leading to low provisions of 3.2bps (28bps in Q1’26) and CANF expects stress to further reduce in Q3’26.

Outlook

We would closely monitor loan growth as target is to grow by 12-13% that would translate to 35% growth in disbursals over H1FY26 (Rs45.6bn). We maintain multiple of 1.8x but increase TP to Rs950 from Rs875 as we roll forward to Sep’27 ABV. Retain ‘BUY’.

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