Can Fin Homes - Target 1000, 18% upside from Current Levels

 Can Fin Homes - Target 1000 - Upside 18.5% from Current Levels

CanFin Homes delivered a steady performance in Q2FY26, reporting 18.9% YoY growth in PAT to ₹251 crore, supported by a 19% jump in NII (Net interest income) and improved NIM (Net Interest Margin) at 4%. The AUM (Asset under management) grew 8.4% YoY to ₹39,657 crore despite higher prepayments. Asset quality held firm with GNPA (Gross Non-performing assets) at 0.94%, while management reiterated its FY26 guidance of ₹10,000–10,500 crore disbursements and 12–13% AUM growth. ICICI Securities maintained its Buy rating with a revised target price of ₹1,000, valuing the company at ~1.9x FY27E BV (Book Value).

Positives

  • Strong earnings momentum with 19% YoY NII growth and resilient profitability.
  • Margins improved to 4%, supported by lower borrowing costs and improved spreads.
  • Asset quality remains robust with GNPA <1% and minimal credit costs.
  • Confident management outlook, reiterating FY26 disbursement and margin guidance.
  • Attractive valuation with stable RoA (2.1–2.3%) and sustainable growth visibility.

Negatives / Risks

  • AUM growth remained subdued due to elevated prepayments and closures.
  • Operating costs stayed high (~19% CI ratio) amid IT transformation and expansion.
  • Telangana recovery still underway, marginally weighing on overall growth.
  • Temporary Q3 slowdown likely as system migration and staff training progress.
  • Margins could face pressure in a competitive or lower-rate environment.


Trading Outlook - 

The company continues to show strong momentum, with margins trending higher and the stock price recently breaking above the July highs on strong volumes a move that likely signals institutional participation. In my view, the setup favors a long position, with a stop-loss around 8–10% below entry levels to manage risk effectively.

Disclaimer > 

The content in this blog post is for educational and informational purposes only. It should not be construed as financial, investment, or trading advice. The information presented is based on personal opinions, analysis, and/or data from sources believed to be reliable; however, its accuracy and completeness are not guaranteed. Please conduct your own due diligence and consult with a qualified financial advisor before making any investment decisions. before taking trade/making an investment. 

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