Target: ₹698

CMP: ₹626.90

Can Fin Homes has witnessed a strong pick-up in disbursements (+123 per cent y-o-y in Q3-FY22) which has translated into strong AUM growth of about 19.5 per cent y-o-y in Q3-FY22. We expect the growth momentum to continue as Can Fin Homes exits FY22.

Demand is adequately supported by revival in confidence in the self-employed segment, while the demand amongst the salaried segment remains healthy. We expect the book to grow at about 20 per cent CAGR over FY22-24 and believe Can Fin Homes could be a beneficiary of the increasing demand in the affordable housing segment.

The company’s asset quality has been one of the best amongst housing finance companies despite Covid-19 related disruptions. For over a decade now, Can Fin Homes has been successful in containing its GNPAs at below 1 per cent.

Can Fin Homes’ ability to sustain asset quality even during a tough environment reflects its entrenched business model despite its much-smaller book size than its peers. The management is now focusing on accelerating growth. It has re-priced its loan book with competitive rates and also to bring down the risk balance transfers.

Furthermore, it is also targeting large cities and metros along with its earlier strategy to expand into tier-3, 4 cities. We like CANF given its favourable loan mix, comfortable liquidity position, and robust CAR.

Published on April 25, 2022