Neutral Can Fin Homes; target of Rs 770: Motilal Oswal

Motilal Oswal recommended Neutral rating on Can Fin Homes with a target price of Rs 770 in its research report dated April 24, 2025.

Broker Research

April 25, 2025 / 22:25 IST

Neutral

26 Aug, 2025 12:21

Volume

Todays L/H

Motilal Oswal's research report on Can Fin Homes

Can Fin Homes (CANF)’s 4QFY25 PAT grew ~12% YoY to ~INR2.3b (in line). FY25 PAT grew ~14% YoY to INR8.6b. 4Q NII grew ~6% YoY to ~INR3.5b (in line). Fees and other income stood at ~INR168m (PY: INR159m). Opex declined ~2% YoY to INR707m (~6% higher than MOFSLe). The costincome ratio stood at ~19.4% (PQ: 16.9%, PY: 20.9%). PPoP grew ~8% YoY to INR2.95b (in line). The effective tax rate for the quarter was lower at ~16% (PQ: ~21% and PY: ~23%) because of tax provision reversal from the prior years. CANF’s 4QFY25 RoA/RoE stood at ~2.6%/~18.5%. Management guided a disbursement growth of ~20% and loan growth of ~15% in FY26. The company has begun witnessing signs of recovery in Karnataka, with disbursements picking up in Feb’25 and Mar’25, supported by a gradual improvement in e-Khata issuances. Additionally, the management indicated that disbursement volumes in Telangana have bottomed out and would only improve from hereon.

Outlook

The stock’s valuation of 1.4x FY27E P/BV suggests management’s inability to deliver on its loan growth guidance because of recurring external events that impede business momentum. We reiterate our Neutral rating with a TP of INR770 (premised on 1.5x Mar’27E P/BV).

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