Neutral Can Fin Homes; target of Rs 900: Motilal Oswal

Motilal Oswal's research report on Can Fin Homes

Can Fin Homes’ (CANF) PAT for 1QFY26 grew ~12% YoY to ~INR2.24b (in line). NII grew 13% YoY to ~INR3.6b (in line). Fees and other income stood at ~INR93m (PY: INR70m) for the quarter. Opex rose ~40% YoY to INR682m (~15% higher than MOFSLe). The cost-toincome ratio stood at ~18.3% (PY: 14.9%). The increase in the cost-toincome ratio on a YoY basis was due to salary revisions to align with market compensation and an increase in rent and taxes for 32 additional offices (25 branches, 6 zonal offices, and an extension of the Head Office). PPoP grew ~9% YoY to INR3.04b. The effective tax rate for the quarter was ~19.4% (PQ: 16% and PY: ~22%). CANF’s RoA/RoE for 1QFY26 stood at ~2.2%/~17%.

Outlook

We reiterate our Neutral rating with a TP of INR900 (premised on 1.8x Mar’27E P/BV).