Can Fin Homes - Q1FY21 - YES Securities

BUY (Target Rs475, Upside 24%)

Significant NIM expansion and lower opex drove a small beat over our higher-than-street PPOP estimate. Precautionary covid-related provisions of Rs360mn (total at 35 bps of loan assets) suppressed PAT growth to 15% yoy. Accentuated fall in borrowing cost, driven by quicker re-pricing of bank loans (most linked to 1m/3m MCLR) and cheaper funds from NHB, caused a NIM increase of 20bps in Q1 FY21. About 14% of customers (majority from regular pool) have not paid any installment in the six-month moratorium. Only 5-6% customers have witnessed salary cut or a job loss. CANF has substantially collected overdues as of March 1. Management does not expect any significant spike in NPL ratios and estimates a steady credit cost for FY21 (30-35 bps). Company plans to raise equity capital up to Rs10bn. CANF is the safest bet in HFC space given strongest balance sheet. Robust liquidity position and strong distribution in Tier 2-4 markets underpin stronger growth prospects. Retain BUY. Raise FY21/22 EPS & ABV estimates by 2-5%. Stock trades at 1.8x FY22 P/ABV for an avg. RoA/RoE delivery of 1.9%/17% over FY21-22 without equity raise.

Shares of CAN FIN HOMES LTD. was last trading in BSE at Rs.388 as compared to the previous close of Rs. 380.85. The total number of shares traded during the day was 49867 in over 777 trades.

The stock hit an intraday high of Rs. 392.35 and intraday low of 384.65. The net turnover during the day was Rs. 19330380.

Source : Equity Bulls

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