Target: ₹696
CMP: ₹616.80
Can Fin Home’s loan book for the quarter grew by 5 per cent q-o-q and 18 per cent y-o-y, at about ₹31,600 crore. The management of CFHL has expressed its commitment to continue expanding the loan book at an annual rate of 18-20 per cent. The NII grew by 5 per cent sequentially and 12 per cent y-o-y. PAT growth was 9 per cent q-o-q and 35 per cent y-o-y. In line with the management guidance, the NIM contracted by 10 bps sequentially at 3.4 per cent.
Best-in-class asset quality During the quarter, the Company improved its asset quality by reducing the GNPA and NNPA by about 5 bps at 0.55 per cent and 0.26 per cent, respectively.
The company also raised its PCR by 100 bps sequentially to 62 per cent, merely to practice a conservative approach, and in the future, management is guided to maintain a PCR ratio at 50-55 per cent.
We have revised our estimates and maintained our view on Can Fin Homes Ltd. with a Buy rating and a target price of ₹696 (2.2x FY24 adjusted book value), suggesting a ~13% upside. We believe that CFHL will grow its loan book at 17-15 per cent in the foreseeable future and maintain its robust asset quality.
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.