Whalesbook
Analyst Predicts Robust Loan Growth
Prabhudas Lilladher's positive outlook is based on forecasts for 14% loan book growth in FY27 and 13% in FY28. This anticipated expansion is fueled by a stronger pickup in fourth-quarter loan disbursements and continued recovery in areas like Karnataka and Telangana. The firm expects Net Interest Margins (NIMs) to hold steady around 3.75% as the loan portfolio is repriced, with Can Fin Homes employing strategies to manage higher borrowing costs.
Asset Quality Improving Amid Expansion Costs
Asset quality at Can Fin Homes is showing consistent improvement. The brokerage projects credit costs to remain low, around 15 basis points in FY27. However, the company is investing in business transformation and expanding its branch network, which is expected to lift the cost-to-income ratio to about 18% between FY27 and FY28. These investments are seen as crucial for future growth, even if they impact operational efficiency in the short term.
BUY Rating Stands on Rs 1075 Target
Using these updated forecasts, Prabhudas Lilladher values Can Fin Homes at 1.8 times its projected Price-to-Adjusted Book Value (P/ABV) for March 2028. This valuation supports a price target of Rs 1075 per share. The brokerage reaffirmed its 'BUY' rating, expressing confidence in the company's prospects for growth and shareholder returns.