Neutral Can Fin Homes; target of Rs 815: Motilal Oswal

Motilal Oswal recommended Neutral rating on Can Fin Homes with a target price of Rs 815 in its research report dated January 23, 2024.

Broker Research

January 25, 2024 / 12:44 IST

Neutral

26 Aug, 2025 12:21

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Motilal Oswal's research report on Can Fin Homes

CANF’s 3QFY24 PAT grew ~32% YoY to ~INR2b (in line). NII grew 31% YoY to ~INR3.3b (in line). 9MFY24 PAT rose 19% YoY to ~INR5.4b. Opex grew ~13% YoY and declined ~6% QoQ to INR494m because of the absence of annual incentives and one-off process enhancement expenses during the quarter. PPoP grew 35% YoY to INR2.9b (in line). Repricing of the last tranche of loans resulted in a ~10bp QoQ improvement in yields. With CoF broadly stable QoQ, NIM expanded ~5bp to ~3.7%. We model NIM of 3.8%/3.7%/3.6% in FY24/FY25/FY26. The management expects an ambitious CAGR of ~20% in loans over the next four years, aided by a) lead originations from digital channels, b) branch expansions and corresponding improvements in productivity, and c) transition to higher ticket-size home loans. We model an AUM/PAT CAGR of 15%/16% over FY23-26E with RoA/RoE of 2.1%/~18% in FY26. CANF, in our view, is a robust franchise with strong moats on the liability side.

Outlook

However, we await a recovery in loan growth and early signs of execution on loan growth guidance before turning constructive on the stock. At 1.6x Mar’26E P/BV, we believe valuations largely price in the positive factors. Maintain Neutral with a TP of INR815 (1.8x Mar’26E BV).

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