Can Fin Homes Q3 Results Review - Better Quarters In Store: Yes Securities

Low disbursement and higher slippages underwhelming; resilient margin and strong profitability positives.

<div class="paragraphs"><p>Can Fin Homes Ltd. branch in Sangareddy, Bengaluru. (Source: Company website)</p></div>
Can Fin Homes Ltd. branch in Sangareddy, Bengaluru. (Source: Company website)

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

Can Fin Homes Ltd.'s Q4 FY24 performance was characterised by expectedly modest originations (process changes/tightening), larger-than-expected non-performing loan increase (flow from non restructured was marginally higher) and better-than-expected margin performance (Spread/Net interest margin improved QoQ).

Hence, even while disbursements were lower and credit cost was higher than our expectations, the NIM/pre-provision operating profit/profit after tax were 3-5% higher than estimates.

With portfolio run-off rate stable, the loan portfolio grew by 2% QoQ/13% YoY, marking a significant moderation from 18% growth rate couple of quarters back.

Portfolio NIM improved further by 7 basis points to 3.69% on the back of improvement in portfolio yield (10.01% versus 9.93%) with repricing of residual book (~Rs 67 billion). Incremental Portfolio Yield was 9.91% and Incremental cost of funds was 7.35%, and hence Incremental Spread was 2.6%.

Gross non-performing loans increased by 21% QoQ (level rose from 0.76% to 0.91%) due to significant slippages from restructured portfolio and seasonal increase in slippages from non-restructured book.

Higher slippages drove higher-than-usual credit cost at 37 bps. Management overlay provisions of Rs 340 million were not utilised by the company.

Return on assets/return on equity for the quarter was strong at 2.3%/19.4%.

Click on the attachment to read the full report:

Yes Securities Can Fin Home Q3 FY24 Results Preview.pdf
Axis Bank Q3 Results Review - Continues To Outperform ICICI Bank On Slippage: Yes Securities


This 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.