Buy Can Fin Homes target of Rs 670: Sharekhan

Sharekhan is bullish on Can Fin Homes has recommended buy rating on the stock with a target price of Rs 670 in its research report dated January 20, 2023.

Broker Research

January 23, 2023 / 20:52 IST

Sharekhan's research report on Can Fin Homes

Can Fin Homes reported strong earnings growth with a PAT at Rs. 152 crore (up 31% y-o-y/ 7% q-o-q) driven by 24% yoy growth in operating profits and 49% yoy decline in provisions. Loan growth remained strong, advances grew by ~20% y-o-y and 4% q-o-q. Disbursements grew by 9% q-o-q and degrew by 1% y-o-y. NII grew by 22.0% y-o-y but sequentially it remained flat q-o-q mainly due to a q-o-q decline in NIMs (cal. as % of Avg. loans) by 15 bps to 3.42%. GNPA ratio/ NNPA ratio improved sequentially to 0.60%/ 0.30% and PCR improved to ~50% vs 43% q-o-q. Credit cost stood at 11 bps annualised vs 19 bps q-o-q. At the CMP, the stock trades at 1.9x/1.6x/ 1.4x of FY2023E/ FY2024E/ FY20215 ABV estimates.

Outlook

We maintain Buy rating on the stock with an unchanged PT of Rs. 670. We expect healthy trajectory in loan growth and stable asset quality trends to sustain while margins remain a key monitorable. We also believe re rating will be driven by new management.

For all recommendations report, click here