2nd May 2023

Result Update | Sector: Home Finance

Retail Research I 4QFY23 I BUY
Can Fin Homes Ltd.
Current Price Rs. 620 Key Highlights of 4QFY23
Target Price Rs. 755 Strong performance continued with healthy loan book growth
Upside 22% The company during the quarter has reported 10%/35% YoY growth in NII/
Net profit to Rs 261 and Rs 166 cr respectively. The full year NII/ Net profit
STOCK DATA were up 24%/32% YoY to Rs 1,015 and Rs 621 cr respectively. The full
Industry Segment Home Finance numbers were marginally lower than our expectations. The growth
BSE Code 511196 continued to be contributed by higher yield and controlled cost of funds
NSE Code CANFINHOME though the speed of yield expansion is now getting slower while costs of
Bloomberg Code CANF IN funds are now outpacing the yield. The disbursement dropped 6.2% YoY
52 Week High / Low (Rs.) 678/407 but was up 3.8% QoQ to Rs 2,538 cr due to high-interest rates and supply-
Face Value (Rs.) 2.0
side challenges in key markets. The disbursement for the full year clocked
Diluted Number of Shares (Crore.) 13.31
Market Cap. (Rs Crore.) 8,207.0
growth of 8.1% YoY to Rs 8,947 cr during FY23. The overall loan book grew
Avg. Yearly Volume (NSE) 1,05,0437 18% YoY.

Asset quality remained resilient

SHAREHOLDING PATTERN (%) The company’s asset quality remained resilient with a GNPA of 0.55% and
Particulars Jun-22 Sep-22 Dec-22 Mar-23 NNPA of 0.26% and the management has guided for similar asset quality
going ahead. The NIM and RoA remained healthy at 3.5%/2.2%
Promoters 30.0 30.0 30.0 30.0
respectively. The NIM dropped 70 bps YoY due to a drop in spread as the
FII - 9.3 10.0 10.4 cost of funds outpaced the yield expansion.
Other Institution 24.8 23.3 23.5 25.0
Public & Others 45.2 37.4 36.5 34.7 The growth trend to sustain as the Demand-Supply dynamic becomes
Total 100.0 100.0 100.0 100.0 favourable

RETURNS STATISTICS (%)

The loan book of the company clocked a growth of 18% YoY to Rs 31,563
cr. The management is confident of growing the book size between 18-
Particulars 1M 3M 6M 12M
20%. With a stable interest rate environment and improvement in the
Can Fin Homes Ltd 14.3 10.1 14.7 (7.1) supply environment in key markets, the disbursement is expected to pick
BSE Small Cap 8.7 3.7 (0.7) (0.3) up going ahead. The company will add 10-15 branches going ahead to
derive 38-40% of business from non-Southern markets.
Stock Performance (1-year)
FINANCIAL SNAPSHOT (Rs. In Cr.)

CanFin Homes Ltd BSE Smallcap Y/E March 2021A 2022A 2023A 2024E 2025E
120.0
NII (Rs Cr) 798.0 816.2 1,014.6 1,231.4 1,474.4
100.0 Growth (%) 18.3 2.3 24.3 21.4 19.7
80.0 PAT (Rs Cr) 456.1 471.1 621.2 732.4 878.9
Growth (%) 21.3 3.3 31.9 17.9 20.0
60.0
EPS (Rs) 34.2 35.4 46.6 55.0 66.0
40.0
BV (Rs) 196.0 230.3 273.9 325.3 387.7
Jun-22

Dec-22
Oct-22
Apr-22

Feb-23

Apr-23
Aug-22

ABV (Rs) 180.8 217.5 260.8 311.1 370.5

P/BV (x) 3.2 2.7 2.3 1.9 1.6
PE (x) 18.1 17.5 13.3 11.3 9.4
Source: NSE
P/ABV (x) 3.4 2.9 2.4 2.0 1.7
Div Yield (%) 0.4 0.4 0.4 0.5 0.5
ROE (%) 19.2 16.6 18.5 18.4 18.5
CAN FIN Homes Ltd. Result Update | Sector: Home Finance

Maintain BUY- Price Target Rs 755/-

At the current price of Rs 620, the stock is trading at 11.3x/9.4x of its
FY24e/25e earnings respectively, whereas on P/Adj.Bv basis the same is
available at 2.0x/1.7x respectively. We maintain our buy rating on the
stock with a price target of Rs 755.0
Loan book trend-wise Margin and return matrix -wise
Loan Book (Rs Cr) % Growth (Q-o-Q)
NIM (%) ROA (%)
35,000.0 8.0
30,000.0 7.0 5.0
25,000.0 6.0
4.0
20,000.0 5.0
4.0 3.0
15,000.0 3.0 2.0
10,000.0 2.0
5,000.0 1.0 1.0
- - -

1QFY22

2QFY22

3QFY22

4QFY22

1QFY23

2QFY23

3QFY23

4QFY23
1QFY22

2QFY22

3QFY22

4QFY22

1QFY23

2QFY23

3QFY23

4QFY23

Source: Company, SSL Research Source: Company, SSL Research

Asset Quality Yield and Cost of Funds

Gross NPA (%) Net NPA (%) Yield on Advances (%) Cost of Fund (%)
1.0 0.6
12.0
0.8 0.5 9.9
10.0 8.5 8.9 8.9
8.1 8.0 8.1 8.1
0.4
0.6 8.0 7.5
0.3 6.6 6.6
6.0 5.7 5.6 5.6 5.6 5.8
0.4
0.2 4.0
0.2 0.1 2.0

- - -
1QFY22

2QFY22

3QFY22

4QFY22

1QFY23

2QFY23

3QFY23

4QFY23
1QFY22

2QFY22

3QFY22

4QFY22

1QFY23

2QFY23

3QFY23

4QFY23

Source: Company, SSL Research Source: Company, SSL Research

Liability Mix (%) Loan Book Break Up (%)

NHB Bank Loans Public Deposit NCD / CP Housing Loan Non Housing Loan

100.0 100.0
9.5 9.7 10.1 10.4 10.4 10.5 10.8 10.9
26.0 24.0 22.0 25.0 22.0 22.0 24.0 22.1
80.0 2.0 2.0 2.0 1.5 80.0
2.0 2.0 2.0 2.0
60.0 60.0
47.0 50.0 53.0 51.0 54.0 54.0 51.0 53.9 90.5 90.3 89.9 89.6 89.6 89.5 89.2 89.1
40.0 40.0

20.0 20.0
25.0 24.0 23.0 22.0 22.0 22.0 23.0 22.5
- -
1QFY22

2QFY22

3QFY22

4QFY22

1QFY23

2QFY23

3QFY23

4QFY23
1QFY22

2QFY22

3QFY22

4QFY22

1QFY23

2QFY23

3QFY23

4QFY23

Source: Company, SSL Research Source: Company, SSL Research

SBICAP Securities Limited | 2

CAN FIN Homes Ltd. Result Update | Sector: Home Finance

4QFY23 Result Figures in Rs. Crs.

Q-o-Q Y-o-Y Y-o-Y

Particular 4QFY23 3QFY23 4QFY22 FY23 FY22
% Chng % Chng % Chng

Interest Income 752.1 704.6 6.7 555.8 35.3 2,715.4 1,969.7 37.9
Finance Cost 490.8 452.9 8.4 318.5 54.1 1,700.9 1,153.5 47.5
Net Interest Income 261.3 251.7 3.8 237.3 10.1 1,014.6 816.2 24.3
Fee and Other Income 12.2 5.1 140.7 5.5 123.1 27.7 18.8 47.1
Net Revenue 273.5 256.8 6.5 242.8 12.7 1,042.3 835.0 24.8
Total Operating Expenditure 51.7 43.8 17.9 48.2 7.3 176.5 153.0 15.3
Employee Cost 22.4 21.4 4.8 18.3 22.6 83.7 76.8 9.0
Other Exp. 14.5 11.1 30.4 19.3 (24.9) 48.3 40.9 18.0
Depreciation 3.7 3.2 13.2 2.2 64.0 12.5 9.8 27.0
Fees and Commission Expense 11.1 8.1 37.1 8.3 33.2 32.0 25.4 25.7
Profit before Prov and Before Tax 221.8 212.9 4.2 194.6 14.0 865.8 682.0 26.9
Provision 23.8 8.4 182.7 30.2 (21.3) 41.8 46.9 (11.0)
Profit Before Tax 198.0 204.5 (3.2) 164.3 20.5 824.0 635.1 29.8
Tax Expenses 32.2 53.0 (39.3) 41.4 (22.3) 202.8 164.0 23.7
Net Profit After Tax 165.8 151.5 9.4 122.9 34.9 621.2 471.1 31.9
Tax Rate (%) 14.5 24.9 21.3 23.4 24.0
Equity (Rs Cr) 26.6 26.6 - 26.6 - 26.6 26.6 -
EPS (Rs) 12.5 11.4 9.4 9.2 34.9 31.1 23.6 31.9
Loan book (Rs Cr) 31,563.0 30,115.0 4.8 26,711.0 18.2 31,563.0 26,711.0 18.2
Disbursement (Rs Cr) 2,538.0 2,444.0 3.8 2,705.0 (6.2) 8,947.0 8,279.0 8.1

Ratios 4QFY23 3QFY23 4QFY22 FY23 FY22

GNPA (%) 0.6 0.6 0.6 0.6 0.6

Net NPA (%) 0.3 0.3 0.3 0.3 0.3
Provisioning Coverage (%) 52.7 50.0 53.1 52.7 53.1
Other Ratio (Calculated)
NIM (%) 3.5 3.5 4.2 3.4 3.5
Yield on Advances (%) 9.9 8.9 8.1 9.9 8.9
Cost of Fund (%) 7.5 6.6 5.6 7.5 6.6
Spread (%) 2.4 2.2 2.6 2.4 2.2
ROE (%) 17.0 17.3 16.0 18.2 17.3
ROA (%) 2.2 2.2 2.1 2.3 2.2

New Estimate Old Estimate % Change

Year FY24e FY25e FY24e FY25e FY24e FY25e
Loan Book (Rs cr) 37,681.5 45,783.1 38,295.70 45,783.07 (1.6) -
NII (Rs cr) 1,231.4 1,474.4 1,311.50 1,474.44 (6.1) -
Net Profit (Rs Cr) 732.4 878.9 782.3 878.88 (6.4) -
GNPA (%) 0.5 0.5 0.5 0.50 (0.0) -
NIM (%) 3.4 3.4 3.6 3.40 (0.2) -
RoA (%) 2.0 2.0 2.1 2.03 (0.1) -
Adj.BVPS (Rs) 311.1 370.5 312.1 370.48 (0.3) -
Source: SSL Research

SBICAP Securities Limited | 3

 CAN FIN Homes Ltd. Result Update | Sector: Home Finance

Financial Statements
Income Statement Figures in Rs Cr. Key Financial Ratios:
Particulars FY21A FY22A FY23A FY24E FY25E Particulars FY21A FY22A FY23A FY24E FY25E
Interest Income 2,006.4 1,969.7 2,715.4 3,317.4 4,061.9 Return Ratios

Total Finance Cost 1,208.3 1,153.5 1,700.9 2,086.0 2,587.5 ROE (%) 19.2 16.6 18.5 18.4 18.5

Net Interest Income 798.0 816.2 1,014.6 1,231.4 1,474.4 ROA (%) 2.1 1.9 2.0 2.0 2.0

Fee & Other Income 12.1 18.9 27.7 37.0 44.7 NIM (%) 3.7 3.3 3.3 3.4 3.4
Op. Profit Margin (%) 84.7 81.7 83.1 83.6 83.7
Net Revenue 810.1 835.0 1,042.3 1,268.5 1,519.1
PAT to Interest Income (%) 22.7 23.9 22.9 22.1 21.6
Total Expenditure 124.0 153.0 176.5 208.6 248.0
Cost to Income (%) 15.3 18.3 16.9 16.4 16.3
Employee Cost 70.0 76.8 83.7 104.7 125.3
As % of Net Revenue 8.6% 9.2% 8.0% 8.3% 8.3%
Earning Ratios
Other Operating Cost 54.0 76.2 92.7 103.9 122.7
Yield on Advances (%) 9.5 8.2 9.4 9.6 9.7
As % of Net Revenue 6.7% 9.1% 8.9% 8.2% 8.1%
Cost of Borrowing (%) 6.4 5.3 6.3 6.5 6.7
Operating Profit Before Prov. 686.1 682.0 865.8 1,059.9 1,271.1
Provision 68.5 46.9 41.8 56.6 67.2 Spread (%) 3.1 2.9 3.1 3.1 3.0

Prior Year Adjustments - - - - -

PBT 617.6 635.1 824.0 1,003.3 1,203.9 CAR % 25.6 23.2 23.1 23.7 22.6

Tax 161.5 164.0 202.8 270.9 325.1 Leverage (x) 8.5 9.1 9.1 9.1 9.2

Net Profit 456.1 471.1 621.2 732.4 878.9

Asset Quality
GNPA (Rs Cr) 201.9 170.6 173.8 188.4 228.9
Balance Sheet Figures Rs in Cr.
GNPA (%) 0.9 0.6 0.6 0.5 0.5
Equities & Liabilities FY21A FY22A FY23A FY24E FY25E Provisioning (%) 32.9 52.4 52.0 49.8 49.8

Equity Share Capital 26.6 26.6 26.6 26.6 26.6 Valuation Ratios

Other Equity 2,583.2 3,040.0 3,620.6 4,304.9 5,135.7 PE (x) 18.1 17.5 13.3 11.3 9.4

Total Shareholder's Fund 2,609.8 3,066.6 3,647.3 4,331.6 5,162.4 P/BV (x) 3.2 2.7 2.3 1.9 1.6

Financial Liabilities P/ ABV (x) 3.4 2.9 2.4 2.0 1.7

Borrowings & Deposits 19,292.9 24,647.7 29,068.1 34,794.5 42,066.5 Div. Yield (%) 0.4 0.4 0.4 0.5 0.5
Payables and Other Fin.
55.1 183.4 298.4 254.6 11.3 Source: SSL Research
Liabilities
Non-Fin. Liabilities 115.9 46.7 56.7 116.5 141.6
Recommendation History
Total Liabilities 22,073.7 27,944.3 33,070.5 39,497.2 47,381.8
Assets Close Price Target Price
Financial Assets
Cash and Bank Balance 21.5 324.1 308.5 229.1 79.0
950.0
817.0
Investments 49.6 1,126.0 1,459.0 1,459.0 1,459.0 800.0 743.0 755.3
Loans and advances 21,891.5 26,378.1 31,193.3 37,681.5 45,783.1
647.0
636.0
650.0
Other Fin.Assets 4.4 7.1 12.1 4.9 5.7 662.0
Total Fin. Assets 21,967.0 27,835.2 32,972.9 39,374.6 47,326.8 500.0
Total Non-Fin. Assets 106.7 109.2 97.6 122.6 54.9
350.0
Total Assets 22,073.7 27,944.4 33,070.5 39,497.2 47,381.8
200.0
Dec-21

Dec-22
Apr-21

Apr-22

Apr-23
Aug-21

Aug-22

SBICAP Securities Limited | 4

CAN FIN Homes Ltd. Result Update | Sector: Home Finance

SBICAP Securities Limited I Rajesh Gupta I Tel.: 022-4366 3524 I email: rajesh.gupta@sbicapsec.com

SBICAP Securities Limited

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DISCLOSURES & DISCLAIMERS:

Analyst Certification: The views expressed in this research report ("Report") accurately reflect the personal views of the
research analysts ("Analysts") employed by SBICAP Securities Limited (SSL) about any and all of the subject issuer(s)
or company(ies) or securities. This report has been prepared based upon information available to the public and sources,
believed to be reliable. I/We also certify that no part of my/our compensation was, is, or will be directly or indirectly
related to the specific recommendation(s) or view(s) in this report.

The Analysts engaged in preparation of this Report or his/her relative:-

(a) do not have any financial interests in the subject company mentioned in this Report; (b) do not own 1% or more of
the equity securities of the subject company mentioned in the report as of the last day of the month preceding the
publication of the research report; (c) do not have any material conflict of interest at the time of publication of the Report.

The Analysts engaged in preparation of this Report:-

(a) have not received any compensation from the subject company in the past twelve months; (b) have not managed or
co-managed public offering of securities for the subject company in the past twelve months; (c)have not received any
compensation for investment banking or merchant banking or brokerage services from the subject company in the
past twelve months; (d) have not received any compensation for products or services other than investment banking
or merchant banking or brokerage services from the subject company in the past twelve months; (e) has not received
any compensation or other benefits from the subject company or third party in connection with the Report; (f) has
not served as an officer, director or employee of the subject company; (g) is not engaged in market making activity
for the subject company.

Name Qualification Designation

Sudeep Shah MBA (Finance) DVP – Technical & Derivative Research
Sunny Agrawal B.E., MBA (Finance) DVP – Fundamental Research
Rajesh Gupta PGDBM (Finance), MA (Bus. Eco) AVP- Fundamental Research
Monica Chauhan CA Research Analyst – Fundamental Research
Harsh Vasa CA Research Analyst - Equity Fundamentals
Vinayak Gangule B.E. (IT) Research Analyst - Equity Technicals
Amit Chawla B.Com Research Analyst - Equity Technicals
Gautam Updhyaya MBA (Finance) Research Analyst - Equity Derivatives
Netra Deshpande MMS (Finance) Sr. Research Analyst - Currency & Commodity Fundamentals
Pratik Patni BSc (Biotech Entire) Research Analyst- Equity Derivatives
Kalpesh Mangade B.Com MIS Analyst - Retail Research

For other Disclosures please visit: https://bit.ly/R_disclaimer02

SBICAP Securities Limited | 5