Why Did Prabhudas Lilladher Raise Its Target for Can Fin Homes to ₹950?
Can Fin Homes Ltd has delivered a strong performance this quarter, posting a 15.6% PAT beat on the back of higher Net Interest Income (NII) and stable Net Interest Margins (NIM). Brokerage house Prabhudas Lilladher has reiterated its BUY rating on the stock while revising the target price upward to ₹950 from the earlier ₹875, citing consistent loan growth and better-than-expected credit cost management.
The company’s focus on asset quality and improved operating leverage has positioned it well within the housing finance space, especially at a time when affordable housing demand remains strong across Tier-II and Tier-III cities.
For the September quarter, Can Fin Homes reported that NIMs stood steady at 3.75%, with around 60% of its loan book undergoing annual resets. The company continues to maintain its disciplined approach towards loan book diversification, with a focus on salaried borrowers forming the majority of its portfolio. Loan growth has been guided in the range of 12–13% annually, translating to around 35% growth in disbursals over the first half of FY26.
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The steady improvement in asset quality, combined with prudent underwriting and a low-cost funding base, continues to aid profitability. Analysts highlight that Can Fin’s credit cost control has been better than the industry average, which further strengthens confidence in the company’s growth visibility over the next few years.
The key financial highlights and guidance from the report are summarized below:
| Metric | Current Value / Guidance | Commentary |
|---|---|---|
| PAT Growth | +15.6% | Driven by higher NII and lower credit cost |
| NIM | 3.75% | Stable margin guidance maintained |
| Loan Growth | 12–13% | Targeted disbursal growth over H1FY26 |
| Disbursal Growth | 35% | Driven by retail demand |
| Target Price | ₹950 | Raised from ₹875 (1.8x multiple) |
Prabhudas Lilladher notes that 60% of Can Fin’s loan portfolio comes with an annual reset clause, which ensures that margins are largely insulated from short-term rate fluctuations. This flexibility allows the lender to maintain profitability even in a changing interest rate environment. Furthermore, the company’s cost of borrowing remains competitive, aided by its AAA rating and conservative leverage approach.
The brokerage expects return ratios to improve steadily, with ROA around 2% and ROE near 16–17% over FY26. With healthy asset quality and stable earnings trajectory, Can Fin Homes remains one of the most consistent performers in the housing finance space.
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Going forward, analysts expect the housing finance segment to benefit from rising disposable incomes, improving urban infrastructure, and government incentives for affordable housing. Can Fin’s focus on low-risk borrowers and strong underwriting systems are likely to protect margins and maintain a steady loan growth trajectory despite sectoral competition.
At a valuation of 1.8x FY26E book value, the stock offers a balanced mix of growth visibility and valuation comfort. Investors seeking exposure to the housing finance sector with a medium-term view may consider accumulating on dips.
Investor Takeaway
Indian-Share-Tips.com Nifty Expert Gulshan Khera, CFP®, who is also a SEBI Regd Investment Adviser, observes that Can Fin Homes’ steady profitability and prudent risk control make it a standout among mid-sized housing finance companies. The revised target of ₹950 underscores confidence in the company’s fundamentals, with consistent NIM, low credit cost, and sustained growth visibility supporting its investment case.
Discover more expert-backed analysis and actionable research at Indian-Share-Tips.com, which is a SEBI Registered Advisory Services.
Related Queries on Can Fin Homes
- What Is Driving Loan Growth at Can Fin Homes?
- How Does Annual Loan Reset Benefit Housing Financiers?
- Is Can Fin Homes a Safe Bet Among Mid-Sized NBFCs?
- What Are the Key Triggers for Re-Rating Can Fin Homes?
SEBI Disclaimer: The information provided in this post is for informational purposes only and should not be construed as investment advice. Readers must perform their own due diligence and consult a registered investment advisor before making any investment decisions. The views expressed are general in nature and may not suit individual investment objectives or financial situations.
