Numbers

Claude View

The Numbers

Can Fin Homes trades at 11.7x trailing earnings and 2.1x book value, pricing in steady-state returns with no premium for growth. The stock is range-bound between ₹690 and ₹972 over the past year. The single metric most likely to rerate this stock is NII growth trajectory — if quarterly NII can sustain the acceleration seen in Q2-Q3 FY2026 (₹410-431 Cr vs ₹328-365 Cr a year ago), the multiple expands. A GNPA creep above 1.0% would derate it.

Valuation Snapshot

CMP (₹)

859

P/E Ratio

11.7

P/Book

2.1

EPS (TTM, ₹)

64.4

Market Cap (₹ Cr)

114,260

ROE

18.2%

Div Yield

1.4%

Book Value (₹)

410

The stock trades at just 2.1x book — a significant discount to newer HFCs like Aadhaar (3.1x), HomeFirst (2.9x), and Aptus (2.7x) — reflecting its parent-bank legacy, slower AUM growth, and modest return profile. At 11.7x earnings, it is priced closer to LIC Housing (5.4x) and Repco (5.4x) than to the growth-premium segment.

Net Interest Income — The Core Engine

NII has compounded at 16% annually over the last 6 years, accelerating from ₹557 Cr (FY2019) to ₹1,391 Cr (FY2025). PAT grew even faster at 19% CAGR over the same period due to operating leverage and declining cost-to-income ratio.

Quarterly Earnings Trajectory

Q2-Q3 FY2026 show a clear inflection — NII jumped from ₹350-372 Cr to ₹410-431 Cr, a sequential acceleration that had been absent for 5 quarters. PAT crossed ₹250 Cr for the first time in Q3 FY2026. This is the data point the market will reprice if sustained.

Asset Quality — GNPA/NNPA Trend

GNPA rose from a trough of 0.55% (Q4 FY2023) to a range of 0.87-0.98% over the last 8 quarters. It has stabilized near 0.92% despite portfolio growth. Q1 FY2026 hit 0.98% — a watchpoint — but pulled back to 0.92% by Q3 FY2026. NNPA at 0.49% remains well-controlled. For a housing finance company, sub-1% GNPA is a strong position.

Profitability — ROE and ROA

Operating Efficiency

Cost-to-income ratio has ranged between 16% and 25% — at the efficient end for HFCs. The FY2024 spike to 25% coincided with IT transformation spending. FY2025's pullback to 21.6% suggests the one-off cost is normalizing.

Balance Sheet — Deleveraging Story

Leverage has declined from 11x in FY2017 to 6.9x in FY2025 — a structural shift. Equity has grown 4.7x largely through retained earnings, while debt growth has been more disciplined. CRAR stood at 25.58% as of Q2 FY2026, well above the regulatory minimum of 15%.

EPS Growth and Payout

EPS has compounded at 17.5% CAGR from ₹17.68 (FY2017) to ₹64.37 (FY2025). The dividend payout ratio jumped to 19% in FY2025 — the highest in a decade — signaling management confidence in sustained earnings power. At ₹859/share, the stock trades at just 13.3x FY2025 EPS.

Shareholding Pattern

FII holding has risen steadily from 11.5% to 13.4% over the last 2 years — a quiet accumulation. DII holding has declined from 28% to 24.6%, likely driven by profit booking by mutual funds. Promoter (Canara Bank) holds steady at 29.99%. The FII buying is a positive signal for institutional confidence.

Peer Comparison

No Results

Can Fin Homes occupies a distinctive middle ground: its ROE (18.2%) is the highest among listed HFCs in this peer set, yet it trades at a deep discount to newer players (Aadhaar at 20.5x, HomeFirst at 23.4x). The valuation gap reflects market preference for high-growth, low-leverage models over Can Fin's parent-bank-backed approach.

This scatter plot is the critical chart. Can Fin Homes sits in the bottom-right quadrant — high ROE, low P/E — the classic "value with quality" positioning. The market is either mispricing the quality or pricing in a risk (promoter overhang, growth ceiling) that the fundamentals do not yet reflect.

Revenue and PAT Growth Rates

FY2025 revenue growth slowed to 10.1% as interest rate headwinds compressed NIM. PAT grew faster at 14.1% due to operating leverage and lower tax rate (20% vs 22%). The key question for FY2026: can Can Fin Homes reaccelerate AUM growth toward 15%+ while defending spreads?

9-Month FY2026 Run Rate

No Results

Based on 9M FY2026 data (Q1-Q3), the annualized NII run rate is ~₹1,618 Cr (+16% YoY) and PAT run rate is ~₹987 Cr (+15% YoY). At ₹859, this implies a forward P/E of ~11.6x FY2026E — still undemanding if growth sustains.

Morgan Stanley maintains Overweight with a ₹1,000 target price. Analyst consensus target stands at ₹888. The stock appears undervalued relative to its ROE quality and improving growth trajectory in H2 FY2026.

The Bottom Line

The numbers confirm Can Fin Homes is a high-quality housing financier: 18% ROE, 2.1% ROA, sub-1% GNPA, 22% cost-to-income, and steady earnings compounding. What the numbers contradict is the market's implied pessimism — an 11.7x P/E for an 18% ROE company with accelerating NII growth is hard to justify unless you expect meaningful deterioration in asset quality or a permanent growth ceiling. What must be watched next quarter: whether the Q2-Q3 FY2026 NII acceleration (₹410-431 Cr) sustains into Q4, and whether GNPA remains below 1.0%.