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

Prabhudas Lilladher is bullish on Can Fin Homes has recommended buy rating on the stock with a target price of Rs 950 in its research report dated July 20, 2023.

Broker Research

July 21, 2023 / 19:16 IST

Buy

26 Aug, 2025 12:21

Volume

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Prabhudas Lilladher's research report on Can Fin Homes

We increase multiple from 2.1x to 2.3x as we raise FY24/25E PAT by average ~6.5% due to increase NIM and reduction in provisions. With RoA of 2.1% for FY24/25E, likely RoE trajectory has moved up from 16.5-17.0% to 18.0-18.5%. CANF reported yet another strong quarter with better PPoP and PAT led by NIM beat and lower provisions. Asset quality blip was due to slippage from OTR that was guided earlier. We have consistently upgraded earnings since the last 4 quarters and with likely PAT CAGR of 18% over FY23-26E, there are levers for further earnings upgrade given (1) 38% of loans are to be repriced upwards in FY24 (2) interest rates have peaked, high proportion of floating rate borrowings could benefit and (3) provisions could be lower as overlay is Rs170mn despite 70% reduction in OTR pool.

Outlook

Valuation at 2.2x on Mar’25 ABV suggests limited upside although earnings quality remains strong. Rolling forward to Sep’25 ABV, we raise TP to Rs950 from Rs770. Retain BUY.

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