Can’s Q2FY25: Profitability Boosted by Enhanced Operating Efficiency
Company Name: Can Fin Homes Ltd | NSE Code: CANFINHOME | BSE Code: 511196 | 52 Week high/low: 952 / 680 | CMP: INR 885 | Mcap: INR 11,789 Cr | P/BV – 2.54
About the stock
➡️Can fin home is a housing finance company focused in South India, sponsored by Canara Bank. It offered lending product as Housing loan, top-up personal loan, Mortgage caters to both salaried professionals and self-employed individuals. The company’s focus is on medium ticket-size loans, with housing loans constituting a significant portion.
Loan book propelled on healthy disbursement growth
➡️Can Fin homes report a double digit growth in its loan book, growing 10% YoY (+3% QoQ) to 36,591 Cr backed by healthy disbursal during the quarter. This growth is attributed to sound growth in non-salaried segment contribute 29% of overall book, growing at 16% YoY (+6% QoQ) to 10,638 Cr. While salaried segment contribute 71% of overall book, growing at 7% YoY (+2% QoQ) to 25,930 Cr.
➡️Product wise in both segment (salaried & non-salaried) growth supported by home loan growing by 7% and 15% respectively. Home loan influence 79% of total book in Q2FY25 vs 77% of total book in Q2FY24. Remaining 20% allocate to top up loan, Mortgage and loan for site.
➡️Disbursement support the loan growth grew by 18% YoY while on QoQ basis report solid growth of 28% to stood at 2,381 Cr as of Q2FY25.
➡️Borrowing grew in line with the growth of loan book, grew 10% YoY to 33,790 Cr. Funding source followed as bank loan 60%, NHB 14%, NCD 18%, Commercial paper 7% and deposit 1%. Can’s borrowing cost can be lower in coming quarters due to the higher chances of rate cuts from RBI side as banks borrowing has major portion.
| Book Growth (As on) | Q2FY25 | Q2FY24 | YoY (%) | Q1FY25 | QoQ (%) |
| Borrowing | 33,790 | 30,628 | 10% | ||
| Loan Book | 36591 | 33359 | 10% | 35557 | 3% |
| Disbursement | 2381 | 2019 | 18% | 1853 | 28% |
| Salaried | |||||
| HL | 23607 | 22067 | 7% | 23245 | 2% |
| Top up PL | 1121 | 1020 | 10% | 1092 | 3% |
| Mortgage | 950 | 843 | 13% | 899 | 6% |
| Loan for site | 213 | 184 | 16% | 204 | 4% |
| Other | 39 | 41 | -5% | 37 | 5% |
| Sub total | 25930 | 24155 | 7% | 25477 | 2% |
| As % of total | 71% | 72% | -2% | 72% | -1% |
| Non – Salaried | |||||
| HL | 8786 | 7656 | 15% | 8357 | 5% |
| Top up PL | 548 | 437 | 25% | 507 | 8% |
| Mortgage | 1144 | 950 | 20% | 1047 | 9% |
| Loan for site | 109 | 87 | 25% | 99 | 10% |
| Other | 51 | 52 | -2% | 47 | 9% |
| Sub total | 10638 | 9182 | 16% | 10057 | 6% |
| As % of total | 29% | 28% | 6% | 28% | 3% |
| Total | 36,591 | 33,359 | 10% | 35,557 | 3% |
Profitability boom on operating leverage and lower provision
➡️NII grew moderate at7% YoY (+6% QoQ) to 340 Cr led by loan book growth yield remain flat. This moderate growth backed by flattish in yield while CoB jump 10 bps YoY result in contraction in NIMs. PPOP grew 25% YoY (+3% QoQ) to 288 Cr fueled by better operating efficiency (down 36% YoY). PAT up 34% YoY (+6% QoQ) to 211 Cr driven by lower provision.
| Years (in Cr) | Q2FY25 | Q2FY24 | YoY (%) | Q1FY25 | QoQ (%) | Commentry |
| Interest income | 955 | 865 | 10% | 924 | 3% | led by strong disbursement; yield flat |
| Interest expenses | 615 | 548 | 12% | 603 | 2% | |
| NII | 340 | 317 | 7% | 321 | 6% | backed by book growth; NIMS stable |
| Other income | 7 | 6 | 28% | 7 | 7% | |
| Total Net income | 347 | 323 | 8% | 328 | 6% | |
| Employee expenses | 29 | 25 | 16% | 23 | 24% | |
| Other OpEx | 31 | 67 | -55% | 26 | 20% | |
| Total Opex | 59 | 92 | -36% | 49 | 22% | |
| PPOP | 288 | 231 | 25% | 280 | 3% | driven by operating efficiency |
| Provision | 14 | 33 | -58% | 24 | -44% | |
| PBT | 274 | 198 | 38% | 255 | 7% | |
| Tax expenses | 63 | 40 | 57% | 55 | 13% | |
| Tax rate | 23% | 20% | 13% | 22% | 5% | |
| PAT | 211 | 158 | 34% | 200 | 6% | Healthy PAT fueled by lower provision. |
| PAT% | 22% | 18% | 21% | 21% | 2% | |
| EPS | 15.88 | 11.87 | 34% | 14.99 | 6% | |
| No. of equity shares | 13 | 13 | 0% | 13 | 0% |
Asset quality show slight increment YoY while flattish QoQ
➡️Can’s asset quality slight degraded as GNPA/NNPA show increment by 12 bps/ 4 bps YoY to 0.88%/0.47%. While on QoQ basis remain flat. Can’s asset quality is lowered as 70% book given to salaried segment where chances of default is low. Provision coverage ratio stood at 46.41% as of Q2FY25.
| Asset Quality | Q2FY25 | Q2FY24 | YoY (bps) | Q1FY25 | QoQ (bps) |
| GNPA | 0.88 | 0.76 | 12 | 0.91 | -3 |
| NNPA | 0.47 | 0.43 | 4 | 0.49 | -2 |
Valuation and key Metrics
➡️Currently the stock is trading at multiple of 2.55x BV 353 per share at CMP of 886 Rs. Yield on loan slight up 5 bps YoY and flat QoQ to 10.12% while CoB jump 10 bps YoY (- 2bps QoQ) to 7.56%. This result in decline in NIMs by 5 bps while expand 18 bps QoQ.
| Key metrics | Q2FY25 | Q2FY24 | YoY (bps) | Q1FY25 | QoQ (bps) |
| Yield | 10.12 | 10.07 | 5 | 10.12 | 0 |
| CoF | 7.56 | 7.46 | 10 | 7.58 | -2 |
| NIMs | 3.75 | 3.8 | -5 | 3.57 | 18 |
| ROAA | 2.29 | 1.86 | 43 | 2.17 | 12 |
| ROAE | 17.99 | 15.96 | 203 | 17.57 | 42 |
The image added is for representation purposes only
