Can Fin Homes - Poised For Stronger Performance: Yes Securities

NDTV Profit’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer NDTV Profit’s subscribers an opportunity to expand their understanding of companies, sectors and the economy..Yes Securities Report.In the Investor Meetings hosted by us, Can Fin Homes Ltd. have expressed significant confidence in delivering improved disbursements and loan growth and lower non-performing loans and credit cost over the coming quarters. Spread/net interest margin is expected to remain resilient in the near-term and glide towards the guided level of 2.5%/3.5% in the medium term. Management’s aspiration is to grow loan assets 2-3% above the industry without compromising on risk profile and profitability. Capital raising is not required for 15- 17% loan CAGR considering expected sturdy return on asset/return on equity of 2-2.2%/17-18%. The return ratios would get a cushion from normalisation of credit cost amid some trade-off of margin for growth and the planned investment for Tech overhaul. The underwhelming factors of recent quarters, which is sub-optimal disbursements and higher slippages, would significantly turnaround in coming quarters. Hence, the valuation focus/narrative would shift to steady-state growth and profitability (which has been healthy for Can Fin). Current valuation of 2.1 times price/adjusted book value and 12 times price/earning on one-year forward basis, which is significantly below long-term mean, does not fully reflect the high likelihood of a stronger disbursement and credit cost performance. Can Fin’s healthy return on equity of 18% also needs to be valued in the context of lower risk and variability associated with it (average return on equity of 19% for the past 10 years). Company’s RoE and balance sheet quality stands superior to other prime housing finance companies and the affordable HFCs..Click on the attachment to read the full report:.Grasim Industries - Ambitious Targets; Execution Key: HDFC Securities.DISCLAIMERThis report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit..Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

Can Fin Homes - Poised For Stronger Performance: Yes Securities

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