Prabhudas Lilladher's research report on Can Fin Homes
Can Fin Homes (Canfin) saw yet another good quarter with a positive surprise on loan growth, NII and asset quality. Credit accretion was ~21% YoY (PLe. 19%) as disbursals were highest ever at Rs27bn. Business momentum was again driven by salaried housing (+20% YoY). While repayments seem higher, the company suggested that they were in the normal course as competitive intensity has reduced. Guidance for FY23 loan growth/disbursals is ~20%. As guided, NIM continues to improve and even after adjusting for the positive carry on account of LCR it enhanced by ~10bps QoQ. CP share contracted from 19% in Mar’21 to 11%. Overall asset quality improved sequentially. GNPA reduced YoY due to higher resolutions while the restructured and stage-2 pool also declined QoQ led by stronger collection efficiency.
Outlook
Our FY23/24E earnings are largely unchanged. Given the affordable housing potential, we remain optimistic on Canfin as credit momentum could sustain without diluting credit quality. Maintain multiple at 2.7x FY24 ABV and TP at Rs800. Retain BUY.
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