Can Fin Homes Q2 FY27: Can Disbursements Recover After Project Tejas?

The company has guided for FY27 AUM growth of 13–14%, with the outlook closer to 14%. For FY28, management is targeting disbursements of approximately ₹16,000 crore and AUM growth above 15%, closer to 15.5%. These targets indicate an ambition to accelerate growth after the transition period, but execution will be crucial.

Q2 disbursements were reported at ₹2,375 crore, net of cancellations under National Housing Bank (NHB) reporting guidelines. Management also indicated a Q3 disbursement target of around ₹3,500 crore. The extent to which the company achieves this recovery will help investors judge whether the Q2 disruption was temporary or has had a longer-lasting effect on business momentum.

Project Tejas is central to understanding the quarter. The supplied commentary says disbursements at branches fell by around 70–75% during migration, before recovering to approximately 80–90% of the previous run rate in the following month. This supports management's explanation that the disruption was operational rather than necessarily evidence of weaker underlying demand.

Nevertheless, an operational explanation should be tested against subsequent data. Investors should monitor whether disbursements return to normal levels, whether applications convert into loans at the expected pace, and whether the technology system improves turnaround time and customer experience. Completion of the migration is an important milestone, but the benefits depend on how effectively employees and customers adapt to the new processes.

Funding costs will remain an important variable. The company reported an NHB refinance sanction of ₹1,350 crore, expected blended funding costs of approximately 6.6–6.7%, and around ₹2,500 crore in available undrawn sanctions. Management is prioritising cost-effective borrowings over relatively expensive non-convertible debentures (NCDs), according to the supplied notes.

The liability mix also matters. Around 65% of liabilities are reported to be floating-rate, making funding costs sensitive to changes in policy rates and benchmark rates. The company has increased housing-loan rates by 10 basis points, effective October 8, as stated in the supplied information. The effect on spreads will depend on how quickly asset yields and borrowing costs adjust relative to one another.

Prepayments are another important factor for a housing finance company. Q2 prepayments were reported at ₹1,795 crore, compared with ₹1,857 crore in Q1. Monthly prepayments declined from ₹655 crore in July to below ₹600 crore in both August and September. Management believes narrowing differences in lending rates could improve customer retention, but this remains an expectation that needs to be confirmed by future data.

The company also reported a ₹35 crore increase in gross non-performing assets (GNPA) during the first half, compared with ₹40 crore in the corresponding period of the previous year. Management expects GNPA to improve in H2. The actual trend in overdue accounts, slippages, recoveries and write-offs will be important in determining whether that improvement occurs.

A slight increase in SMA-0 accounts was attributed partly to the new system's daily overdue-recognition method. SMA-0 generally refers to accounts showing early signs of overdue payment, within the applicable classification framework. A change in recognition practices can affect reported trends, so investors should distinguish system-related classification effects from any genuine deterioration in borrower repayment behaviour.

Project Tejas is also expected to release approximately 129 employees who were deployed in migration, testing and training for redeployment to business and support functions. Alongside the planned increase in sales staff, this may help restore sourcing capacity. However, the contribution will depend on training, role allocation, technology stability and the ability to convert leads into completed disbursements.

Investor Takeaway

Derivative Pro & Nifty Expert Gulshan Khera, CFP®, who is also a SEBI Regd Investment Adviser, observes that Can Fin Homes' Q2 FY27 outlook depends heavily on restoring normal disbursement activity after Project Tejas. Maintaining ₹13,000 crore in FY27 disbursement guidance and targeting 13–14% AUM growth indicate management's confidence, but Q3 execution will be the immediate test. Investors should also watch funding costs, NIM, prepayments and asset-quality trends to determine whether the expected recovery is translating into sustainable growth. Read more market education at Indian-Share-Tips.com. For enquiries, call 9988877963.

Related Queries on Can Fin Homes Q2 FY27

1. What were Can Fin Homes' Q2 FY27 disbursements?
The supplied concall highlights report disbursements of ₹2,375 crore, net of cancellations under NHB reporting guidelines.

2. What is Can Fin Homes' FY27 disbursement target?
Management has maintained guidance of ₹13,000 crore, according to the supplied information.

3. What is Project Tejas?
Project Tejas is the company's core-system migration initiative. The supplied notes say the migration was completed across branches, with full rollout effective October 1.

4. What are Can Fin Homes' spread and NIM targets?
The supplied summary reports spread guidance of 2.75% or higher and NIM guidance of 3.75% or higher.

5. What is the company's credit-cost outlook?
Management expects normalized credit costs of around 10 basis points, while the Q2 run rate was reported at approximately 9 basis points.

6. What should investors watch in H2 FY27?
Key monitorables include disbursement recovery, branch productivity, deposit and borrowing costs, prepayments, GNPA trends and progress towards the FY27 AUM growth target.