Financial Services – Sector Update – Steady growth with Karnataka recovery underway
Published on 23 Jun 2026
We met with the management of Can Fin Homes (CANF) and visited branches in Bangalore to assess demand trends, underwriting practices and sourcing dynamics in Karnataka. Our interactions indicate strong growth in disbursals, largely driven by self-construction activity and company remains confident of meeting its FY27 target of Rs ~130 bn. We build a loan growth of 14% in FY27E factoring new branches/ manpower addition and e-khaata resolution giving boost to KA/TL run-rate. While larger NBFCs (LIC HF, Bajaj Housing Finance) are key competitors offering lower interest rates, CANF is focusing on direct marketing activities, builder tie-ups, branch expansion and faster TAT to drive growth. Expect FY27/ FY28E NIM to trend in-line with guidance at 3.75% as portfolio reprices; company has built-in levers to manage an elevated CoF. Cost/income ratio to be elevated at ~18% over FY27-28E due to investments in IT and branch expansion; credit cost outlook benign. We value the stock at 1.8x Mar-28E P/ABV, resulting in a TP of Rs 1,075. Reiterate BUY.
