Can Fin Homes Q3 Review — Disbursements Soft; Growth Remains A Concern; 'Hold' The Stock Says Nirmal Bang

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Nirmal Bang Report

Can Fin Homes Ltd.’s earnings were largely in line with our estimates, with net interest income/pre-provision operating profit/ PAT coming at a variation of -1.9%/ -3%/ +2.3%.

Q3 disbursement growth saw a flattish trend due to registration issues in Karnataka/ Telangana. We build a loan growth of ~10% in FY25, factoring in a weak 9M.

Expect FY25E NIM to trend in line with guidance at 3.5% aided by lower CoF in H2. Cost/income ratio is expected to be elevated with increased investments in IT/business transformation and expansion.

We revise our FY25/ FY26 estimates factoring in lower disbursements in 9M and higher opex costs. Roll forward our valuation to Dec-26E with a cut in multiple to 1.6 times (versus 1.9x earlier) resulting in a target price of Rs 775. The stock is trading at a 22% discount to 5-year average P/ABV of 2x as growth remains a challenge. Maintain Hold.

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