Buy CanFin Homes; target of Rs 625: ICICI Direct

ICICI Direct's research report on CanFin Homes

CanFin Homes (CFHL) was promoted by Canara Bank in 1987, with ~30% stake as of September 2022. The HFC is spread across 204 locations across 21 states and UTs with south contributing ~72% of loans and focus on tier II & III cities. Most borrowers are first time home buyers with average age of 35 years. • Housing loans comprise ~90% of advances of which ~74% is to salaried customers • The company caters to customers in the mid & affordable segment with average ticket size being Rs 22 lakh for housing and Rs 8 lakh for non-housing loans.

Outlook

We initiate coverage on the stock with a BUY recommendation. We value CFHL at ~1.8x P/ABV FY25E to arrive at a target price of Rs 625 per share.