1. At a Glance
A steady performer in India’s housing finance scene, Can Fin Homes delivered a 12% profit growth in Q1 FY26, with loan book inching up 9% YoY. Asset quality is under mild pressure, but still solid. In a world of NBFC meltdowns and rising costs, Can Fin is the calm, cautious tortoise with a helmet.
2. Introduction with Hook
Imagine a cricket match where one player doesn’t swing wildly, doesn’t sledge, and still ends up with a century. That’s Can Fin Homes. No hype, no drama—just a slow and steady compounder.
- Q1 FY26 Net Profit: ₹224 Cr (+12% YoY)
- Loan Book: ₹38,773 Cr (+9% YoY)
- Liquidity Coverage Ratio: Insane 282% (basically a mini RBI)
Yet, the stock is down ~4% YoY. Why? Read on.
3. Business Model (WTF Do They Even Do?)
Can Fin Homes is a retail-focused Housing Finance Company (HFC), majority-owned (29.99%) by Canara Bank.
Target Market:
- Salaried Class (80–85%)
- Self-Employed Non-Professionals (SENP)
- Tier 2 & 3 Cities (70% of branches are not in metros)
Products:
- Housing loans (main)
- Mortgage loans (LAP)
- Small ticket-size loans (avg. ₹20–25L)
USP:
- Low Cost-to-Income (16.7%)
- Low NPAs (<1%)
- No flashy developers = no flashy disasters
4. Financials Overview
FY25 Snapshot (₹ Cr)
| Metric | FY25 | YoY Growth |
|---|---|---|
| Revenue | 3,878 | +10% |
| Net Profit | 857 | +14% |
| Net Interest Margin | 3.73% | +28 bps |
| Gross NPA | 0.98% | +43 bps |
| Net NPA | 0.54% | +28 bps |
| Capital Adequacy Ratio | 24.61% | Stable |
Profitability = Stable
Asset quality = Slight pressure
Borrowing cost = Rising
5. Valuation
📉 Fair Value Estimate (FY26e)
- EPS (FY26e): ~₹70
- Target P/E Range: 12x–14x
- Fair Value Range: ₹840 – ₹980
Conclusion:
Current price of ₹817 sits at lower end. Stock is not expensive—but not irrationally cheap either.
6. What’s Cooking – News, Triggers, Drama
- Canara Bank Stake Sale? No movement yet, but a potential de-promoterisation event can be value unlocking.
- NCD Issuance Approved – Continued focus on cost-efficient capital raise
- LAP Segment growing faster = Higher yields, but riskier assets
- Branch Expansion: Selective—not in a mad rush like peers
- Q1 FY26 Earnings Call: Scheduled July 21; management expected to address margins & NPA trends
7. Balance Sheet
FY25 Balance Sheet (₹ Cr)
| Particulars | FY24 | FY25 |
|---|---|---|
| Equity Capital | 27 | 27 |
| Reserves | 4,317 | 5,041 |
| Borrowings | 31,863 | 35,051 |
| Other Liabilities | 395 | 849 |
| Total Assets | 36,602 | 40,967 |
Highlights:
- Strong reserve build-up
- Conservative leverage
- Book Value: ₹381 → Stock trading at ~2.1x BV
8. Cash Flow – Sab Number Game Hai
FY25 Cash Flow (₹ Cr)
| Source | Amount |
|---|---|
| Cash from Ops | +933 |
| Cash used in Investing | -785 |
| Cash from Financing | -149 |
| Net Cash Flow | ~Zero |
Insights:
- Cash flow improving after several negative years (due to disbursement-led growth)
- Now in balancing mode: Cash-neutral but healthier optics
9. Ratios – Sexy or Stressy?
| Ratio | FY24 | FY25 |
|---|---|---|
| ROE (%) | 19% | 18% |
| ROA (%) | 2.21% | 2.15% |
| Cost to Income (%) | 16.9% | 16.7% |
| NIM (%) | 3.45% | 3.73% |
| Gross NPA (%) | 0.55% | 0.98% |
| Net NPA (%) | 0.26% | 0.54% |
Verdict:
Margins up. Costs down. NPAs up. Overall, still among the cleanest HFCs.
10. P&L Breakdown – Show Me the Money
FY25 Profit & Loss (₹ Cr)
| Line Item | Amount |
|---|---|
| Total Revenue | 3,878 |
| Interest Exp. | 2,488 |
| Operating Expense | 301 |
| Pre-Tax Profit | 1,077 |
| Net Profit | 857 |
| EPS (Diluted) | ₹64.37 |
| Dividend Payout % | 19% |
11. Peer Comparison
Housing Finance Peers
| Name | CMP ₹ | P/E | ROE % | Gross NPA % | NIM % |
|---|---|---|---|---|---|
| LIC Housing Finance | 628 | 6.3 | 16.0 | 0.74 | ~2.6 |
| PNB Housing Finance | 1082 | 14.4 | 12.3 | 1.50+ | ~2.9 |
| Aptus Value Housing | 350 | 23.3 | 18.6 | 0.75 | ~7.5 |
| AAVAS Financiers | 1903 | 26.2 | 14.1 | ~1.0 | ~6.9 |
| Can Fin Homes | 817 | 12.3 | 18.2 | 0.98 | 3.73 |
Interpretation:
Most efficient (cost & return wise) among peers. Aptus and AAVAS win on NIMs, but Can Fin wins on operating leverage and balance.
12. Miscellaneous – Shareholding, Promoters
| Stakeholder | % Holding (Jun 2025) |
|---|---|
| Canara Bank | 29.99% |
| FIIs | 12.11% |
| DIIs | 24.53% |
| Public | 33.38% |
Trends:
- FIIs have been slowly increasing stake
- DIIs stable
- Promoter stake consistent (no dilution, no pump-and-dump)
- ~1L shareholders → Growing retail interest
13. EduInvesting Verdict™
Can Fin Homes is that rare HFC that combines low drama with high discipline. It doesn’t chase aggressive growth like Aptus or Aavas. It doesn’t carry legacy bloat like LIC HF. It walks the middle path—solid profitability, ultra-low cost structure, and manageable risk.
Yes, NPAs are rising, and yes, growth is not jaw-dropping. But is the business model broken? Nope. The ₹800–850 range looks like a solid accumulation zone for long-term compounding addicts. No firecrackers here—just clean books, clean intent, and a clean P&L.
Metadata
Written by EduInvesting Research | July 20, 2025
Tags: Can Fin Homes, Housing Finance, Q1FY26, NBFCs, Home Loans, Canara Bank
