Buy Can Fin Homes; target of Rs 875: Prabhudas Lilladher

Prabhudas Lilladher's research report on Can Fin Homes

CANF saw a stable quarter as disbursals were in-line leading to AUM growth of 9.0% YoY, while NII was a beat at 3.7% due to lower cost of funds. Despite repo cut of 100bps, company expects NIM of 3.5% in FY26 (3.6% in FY25) as (1) certain portions of bank and NHB borrowings would be repriced lower due to their floating nature and (2) only 5% loans shifted from annual to quarterly reset (67% still at annual reset). Hence, we raise FY26E NIM by 9bps to 3.46%. While both Karnataka and Telangana are stabilizing in business terms, recovery has been slower due to state-specific issues. Disbursal and loan growth targets for FY26 are Rs105-110bn and 12-13%, respectively; we are factoring 11% loan growth as KTK and TL are yet to improve materially. Competition from larger peers and banks would be a key factor in achieving growth as per the guidance.

Outlook

We maintain multiple of 1.8x on Mar’27 ABV, but slightly raise TP to Rs875 from Rs860. Retain ‘BUY’.

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Can Fin Homes - 22072025 - prabhu