Can Fin Homes Q3 Results Review - Closer Eye On Margin Going Ahead: Yes Securities

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Yes Securities Report

Can Fin Homes Ltd.’s Q3 FY23 profit after tax came inline at Rs 1.52 billion, with 3% net interest income miss being made-up by lower-than-expected credit cost. Disbursements, portfolio run-off and loan book growth largely met expectations. Key takeaways of this quarters’ performance were-

1. further acceleration in self employed, non professionals home loan growth (book grew by 22% YoY, a significant improvement from 8% YoY a year back),

2. more-than-expected compression in net interest margin/spread, and

3. benign credit cost underpinned by sustained strong asset quality trends.

Can Fin Homes expects continuance of sturdy loan growth with controlled balance transfer out, and stable-to-improved margins in the medium term.

We marginally cut FY24/25 earnings estimates making some downward adjustment to growth and net interest margins.

We however see company delivering 1.8-19% return on asset/16-17% return on equity over next couple of years and continue to believe that investment risk-reward is favorable at 1.4 times FY25 price/adjusted book value.

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