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

Motilal Oswal recommended Neutral rating on Can Fin Home with a target price of Rs 900 in its research report dated July 21, 2023.

Broker Research

July 22, 2023 / 12:24 IST

neutral

26 Aug, 2025 12:21

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Motilal Oswal's research report on Can Fin Home

Can Fin Homes (CANF) reported a healthy operational performance in 1QFY24, with 13% YoY growth in PAT to ~INR1.84b, driven by lower opex. Credit costs stood at INR137m in 1QFY24 (our est. ~INR125m) because of slippages from the restructured pool of advances. Repricing of ~INR55b of loans in 1QFY24 and incremental disbursements at higher interest rates led to a sequential improvement of ~45bp in yields. Higher yields offset the 30bp QoQ rise in CoF, leading to a ~15bp QoQ improvement in NIM to ~3.6%. Further, repricing of ~INR125b of loans over the next two quarters will help CANF sustain (or even improve) the yields from hereon. We estimate NIM of ~3.5% in FY24/FY25. We model an AUM/PAT CAGR of 16% each over FY23-25E with RoA/RoE of 2%/~18% in FY25.

Outlook

We estimate a 16% CAGR in each of NII/PPOP/PAT over FY23-25 and RoA of 2% and RoE of 18% in FY25. Downgrade to Neutral with a TP of INR900 (based on 2.3x FY25E BVPS).

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