Sharekhan has given Buy recommendation for Can Fin Homes with a target price of Rs. 670 in its research report issued on Oct 18, 2022

Sharekhan’s research report on Can Fin Homes

Can Fin Homes reported a PAT of Rs. 142 crore (up 14.6% y-o-y/ down 12.6% q-o-q) 9% below our estimates mainly due to lower margins, higher standard assets provisioning and a higher tax rate (30% versus our estimates of 26%). Loan growth was strong, and it grew by ~22.2% y-o-y and 4.7% q-o-q. Disbursements grew by 1.7% y-o-y / 30.4% q-o-q. NII grew by 31.0% y-o-y but sequentially it remained flat q-o-q mainly due to a q-o-q decline in NIMs (cal. as % of Avg. loans) by 12 bps reported at 3.57% in Q2FY23. Operating Profits (PPoP) grew by 32.6% y-o-y/ 0.5% q-o-q. GNPA ratio improved sequentially to 0.62% versus 0.65% in Q1FY23 while NNPA ratio increased to 0.35% vs 0.30% in Q1FY23 and PCR declined to ~43% vs 54% in Q1FY23 as there was a plough back of excess provisions from the NPA bucket to standard assets provision bucket.


At the CMP, the stock trades at 1.9x/1.6x of FY2023E and FY2024E BV. We maintain Buy rating on the stock with a an unchanged PT of Rs. 670.

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