Can Fin Homes' September-quarter performance reflected temporary operational disruption from the IT transformation, which weighed on disbursements. Asset quality remained healthy, with overall delinquencies largely stable and credit costs expected to remain benign at <10bp. With the technology rollout now complete, the recovery in disbursements over the coming quarters will be an important monitorable.
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Motilal Oswal Report
Can Fin Homes Ltd.'s September-quarter performance reflected temporary operational disruption from the IT transformation, which weighed on disbursements.
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Asset quality remained healthy, with overall delinquencies largely stable and credit costs expected to remain benign at <10bp.
With the technology rollout now complete, the recovery in disbursements over the coming quarters will be an important monitorable.
The stock trades at 1.4 times FY27E price/book-value. Motilal Oswal models an advances/PAT CAGR of ~12%/6% over FY26-28E, with an RoA/RoE of ~2.3%/~16% in FY28E.
The brokerage reiterates its Neutral rating with a target price of Rs 795 (based on 1.2x Sep'28E P/BV).
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Highlights from Can Fin Homes management commentary
- El Nino-related water shortages could slow construction activity and potentially affect disbursements. If this materialises, the company may adopt short-term measures, such as increasing loan-against-property disbursements or offering construction-related top-up loans to mitigate the impact.
- The IRDAI consultation paper on insurance commissions, if implemented, will not have a material impact on Can Fin as income from insurance distribution contributed less than ~1% of the company's FY26 PBT.
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