Jefferies has reiterated its ‘Buy’ rating on Can Fin Homes, setting a target price of ₹915, reflecting a 29% upside from the current market price (CMP) of ₹708.00. While Q3FY25 performance was slightly below estimates, Jefferies remains optimistic about the company’s long-term prospects, expecting improvements in FY26.
Key Highlights:
- Q3FY25 Performance:
- PAT came in at ₹2.1 billion, reflecting a 6% YoY growth, but fell short of estimates by 3% due to slightly higher provisions.
- Net Interest Margins (NIMs) were steady, supporting profitability despite muted growth.
- Loan Growth Challenges:
- Disbursements were soft, primarily impacted by delays in property registrations in Karnataka due to the mandatory e-Khata (digital records) requirement.
- Normalization of registrations is expected to take time, which could lead to muted loan growth in the near term. However, Jefferies projects an improvement in loan growth by FY26.
- Asset Quality:
- Gross Non-Performing Assets (GNPA) increased marginally by 5bps QoQ in Q3FY25 but are expected to ease in Q4.
- Outlook:
- Jefferies expects Can Fin Homes to maintain steady NIMs while addressing short-term challenges in disbursements. The company’s focus on improving asset quality and operational efficiency positions it for a rebound in FY26.
CMP and Target:
- Current Market Price (CMP): ₹708.00
- Target Price (TP): ₹915
- Upside Potential: 29%
Conclusion:
Jefferies remains optimistic about Can Fin Homes’ long-term potential despite near-term challenges. The brokerage views the stock as an attractive investment at current levels, with expectations of improved loan growth and easing asset quality concerns in the coming quarters.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Investors should consult their financial advisors before making investment decisions.