Can Fin Homes Ltd

20TH July, 2015
Can Fin Homes Ltd
“Sustainbility of high growth leads to further re-rating”
Initiating Coverage
Can Fin Homes Ltd
BUY Snapshot: Can Fin Homes is a Canara Bank-sponsored South-based
Recommendation
housing finance company with Rs8,237 crore loan book, 107 branches and
491 employees.
`810
CMP
`1000 (Upside 23%)
Target Price (`)
Investment Rationale
Stock Details
511196
BSE Code
CANF IN
Bloomberg Code
2156
Market Cap (` cr)
58
Free Float (%)
839/333
52- wk HI/Lo (`)
77910
Avg. Volume (Monthly)
10.0
Face Value (`)
` 7.0
Dividend (FY 15)
Shares o/s (Nos in Crs)
Relative Performance
1Mth
6Mth
1Yr
CANF IN (%)
15.0%
39.2%
94.9%
6.4%
1.1%
12.7%
2.7
Sensex (%)
210
Can Fin Homes Ltd
Sensex
190
170
High growth in loan book: The company has chalked out five-year
business plan to reach Rs35,000 crore loan book by 2020. We believe small
loan book size, 25-30 branches addition on a yearly basis; improved
customer service with lower turnaround time, relatively strong presence in
low ticket & affordable segment will drive high loan book growth for Can
Fin Homes. We expect Can Fin Homes to register 31.5 per cent CAGR in
loan book over FY15-FY18 outpacing other housing financial companies
and banks by a wide margin.
Multiple levers for profitability: In order to improve yields on loans, the
management intends to strategically increase high yield non-housing book
from 9 per cent to 20 per cent. Moreover, as part diversification of funding
strategy, the company aims to increase share of market borrowing in total
funding to 25 per cent from current 9 per cent over the next three years,
which in turn will reduce overall borrowing cost. We think mortgage
business spreads are set to improve from 1.5 per cent in FY15 to 2.1 per
cent in FY18.
Expanding return ratios: With an improvement in net interest margin and
relatively stable credit costs, return on average assets is likely to improve
from 1.2 per cent in FY14 to 1.4 per cent in FY18 (20bps improvement). We
expect that leveraging of raised capital coupled with 20bps RoA
improvement will lead to 20.8 per cent RoE in FY18.
150
130
110
90
70
Valuation & Recommendation: The stock has re-rated on the back of
Jul-15
Jun-15
Apr-15
May-15
Apr-15
Feb-15
Mar-15
Jan-15
Dec-14
Dec-14
Oct-14
Nov-14
Sep-14
Aug-14
Jul-14
Aug-14
50
Shareholding Pattern Mar '15
Promoters Holding
42.4%
Institutional (Incl. FII)
0.1%
Corporate Bodies
0.7%
Public & others
55.7%
Manish Ostwal – Sr. Research Analyst
(+91 22 3926-8136)
Email id: [email protected]
` crore
FY'15
FY'16E
FY'17E
FY'18E
NII
177.6
261.7
358.7
484.2
2|Page
Growth (%)
32.3%
47.3%
37.1%
35.0%
high loan book growth trajectory and improvement in return ratios. Going
ahead, we believe valuation multiple expansion will be contingent upon
sustainability of high loan book growth, further improvement in
profitability and stable asset quality especially Loan Against Property
(LAP) book. We expect Can Fin Homes to deliver 39 per cent CAGR in net
earnings supported by 40 per cent CAGR in net interest income (NII) and
31.5 per cent CAGR in loan book. RoE will improve from 14.1per cent in
FY15 to 20.8 per cent in FY18, aided by NIM expansion, stable asset quality
and increasing leverage. At Rs 810, the stock is trading at 2.1x FY17 book
value / 1.8x FY18 book value and 12.8x FY17 earnings / 9.3x FY18 earnings
and looks attractive given the high earning growth and improving return
ratios. We value the company at 2.2x FY18 book value to arrive price
target of Rs1000 (potential upside 23.4 per cent). We recommend a BUY
on the stock with a price target of Rs1000 over a 9-12 months’ timeframe.
PAT
86.2
124.7
168.0
231.2
EPS (Rs)
32.4
46.8
63.1
86.9
BVPS
289.8
327.2
379.8
454.9
ROE
14.1%
15.2%
17.9%
20.8%
P/B
2.8
2.5
2.1
1.8
P/E (x)
25.0
17.3
12.8
9.3
Initiating Coverage
Can Fin Homes Ltd
INVESTMENT RATIONLE
# High growth in loan book: Loan book grew 39 per cent CAGR over FY11-FY15 supported by aggressive branch
expansion (from 41 branches in FY11 to 107 branches in FY15) and increased productivity at existing branches.
Can Fin Homes reported 61 per cent CAGR in sanction over FY11-FY15. This is largely attributable to increased
focus on growing business and developing strong systems in place. Disbursement growth was in line with
sanctions during the same period.
The company has created its own presence by strategically focusing on low ticket size housing finance space. This
has benefited the company in terms of high loan book growth and lower competitive intensity from banks.
The company has chalked out five year business plan to reach Rs35,000 crore loan book by 2020. Aggressive
branch addition, improved customer interface & service, sizeable investment in technology and customized
mortgage products are key strategic drivers for execution of high growth business plan. Notably, Can Fin Home
Finance has been outpacing peers for loan book and earnings growth over the last three years. We believe small
loan book size, 25-30 branches addition on a yearly basis; improved customer service with lower turnaround
time, relatively strong presence in low ticket & affordable segment will drive high loan book growth for Can Fin
Homes. We expect Can Fin Homes to register 31.5 per cent CAGR in loan book over FY14-FY18 driven by strong
sanction pipeline and growing branch network, outpacing other housing financial companies and banks by a
wide margin.
Exhibit 1: Loan book to grow 31.5%+CAGR over FY14-FY18
45%
Loan book
20000
18887
18000
41%
40%
35%
15109
16000
30%
14000
11623
12000
10000
20%
29%
27%
19%
19%
HDFC Ltd
LIC
Housing
10%
4030
4000
5%
2000
0%
0
FY14
27%
15%
5874
FY13
27%
25%
8302
8000
6000
Exhibit 2: Can Fin Homes fastest growing HFC –FY15
FY15
FY16E
FY17E
FY18E
Dewan Indiabulls
Housing Housing
Finance
finance
REPCO
Home
Finance
Gruh
Can Fin
Finance Homes Ltd
Source: Company, Nirmal Bang PCG Research
# Multiple levers for profitability: Can Fin Homes posted spreads and net interest margin at 1.5 per cent and 2.5
per cent respectively in FY15. In order to improve yields on loans, the management intends to strategically
increase high yield non-housing book from 9 per cent to 20 per cent. Moreover, as part diversification of funding
strategy, the company aims to increase share of market borrowing in total funding to 25 per cent from current 9
per cent over the next three years, which in will turn reduce overall borrowing cost.
We believe increasing share of high yield non-housing book and diversification of funding base will drive
spreads and margins higher significantly. However, competitive pressure will force the company to realign
lending rates which will result into some shave-off of spreads in interim period. We think mortgage business
spreads are set to improve from 1.5 per cent in FY15 to 2.1 per cent in FY18 (60bps improvement – highest
profitability delta within the housing finance sector).
3|Page
Initiating Coverage
Can Fin Homes Ltd
Exhibit 3: Yield and cost of borrowing trend
Exhibit 4: Spreads and net interest margins improving
12.0%
11.5%
11.0%
9.9%
3.5%
9.7%
3.0%
9.5%
2.5%
9.3%
2.0%
9.1%
8.9%
10.5%
8.7%
10.0%
8.5%
FY13
FY14
FY15
FY16E
FY17E
1.5%
1.0%
0.5%
0.0%
FY18E
FY13
Yield on loan book
Cost of borrowings
FY14
FY15
FY16E
Spreads
FY17E
FY18E
NIM
Source: Company, Nirmal Bang PCG Research
# Superior earnings growth in the financial sector: Can Fin Homes reported 25 per cent CAGR in net profit
aided by net interest income growth (34.6 per cent CAGR) over FY12-FY15. Aggressive branch network, recent
capital boost, increasing product portfolio are clear signals for superlative business growth over the coming years.
We expect Can Fin Homes to deliver 39 per cent CAGR in net profit over FY14-FY18 supported by 40 per cent
growth in net interest income and relatively stable asset quality & credit cost. We believe superior earning growth
delta and comfortable asset quality is a rare combination in the financial sector, which lead to re-rating in
valuation multiple.
Exhibit 5: NII and PAT growth
50.0%
Exhibit 6: Highest earning growth in HFCs
Net interest income Y-o-Y
40.0%
PAT Y-o-Y
45.0%
35.0%
40.0%
30.0%
35.0%
25.0%
30.0%
20.0%
25.0%
PAT CAGR over FY14-FY17
23.3%
15.8%
34.0%
22.0%
23.1%
Dewan Indiabulls REPCO
Housing Housing
Home
Finance finance Finance
Gruh
Finance
21.3%
18.0%
15.0%
20.0%
10.0%
15.0%
5.0%
10.0%
0.0%
5.0%
HDFC Ltd
0.0%
FY13
FY14
FY15
FY16E
FY17E
FY18E
LIC
Housing
Can Fin
Homes
Source: Company, Nirmal Bang PCG Research
# Expanding return ratios: Can Fin Homes has reported 1.2 per cent RoA and 14.1 per cent ROE post deferred tax
provision in FY15. With an improvement in net interest margin and relatively stable credit cost, return on average
assets is likely to improve from 1.2 per cent in FY14 to 1.4 per cent in FY18 (20bps improvement). The company
raised capital of Rs 278 crore through a rights issue for growth in 3QFY15. We expect that leveraging of raised
capital coupled with 20bps ROA improvement will lead to 21per cent ROE in FY18. We believe high growth in
secured loans, 90 per cent salaried borrowers and low loan to value ratio (60-70 per cent) will sustain
improvement in return ratio going ahead.
4|Page
Initiating Coverage
Can Fin Homes Ltd
Exhibit 7: DuPont analysis
FY14
FY15E
FY16E
FY17E
FY18E
Net interest income
2.7%
2.5%
2.6%
2.7%
2.8%
Non-interest income
0.4%
0.4%
0.3%
0.3%
0.3%
Operating revenues
3.1%
2.9%
2.9%
3.0%
3.1%
OPEX
0.8%
0.7%
0.7%
0.7%
0.7%
Pre-provision profits
2.3%
2.2%
2.2%
2.3%
2.4%
Provisions
0.2%
0.2%
0.3%
0.4%
0.3%
PBT
2.1%
1.9%
1.9%
1.9%
2.1%
Tax
0.6%
0.7%
0.7%
0.7%
0.7%
PAT
1.5%
1.2%
1.2%
1.3%
1.4%
Leverage
11.8
11.6
12.2
14.2
15.3
18.0%
14.1%
15.2%
17.9%
20.8%
ROE
Source: Company, Nirmal Bang PCG Research
# Well capitalized position support high loan book growth: Can Fin Homes raised capital of Rs278 crore
through a rights issue in 3QFY15 for supporting future balance sheet growth. With this capital raising, tier I
capital has improved 562 bps to 16.1 per cent, and this looks sufficient up to FY18. Moreover, the company has
got board approval for raising Rs300 crore tier II bonds for business growth. We believe improving macros,
higher tax incentive for housing loans and favorable policy for low income & affordable segment housing puts
Can Fin Homes in a strong position to reap benefits for higher growth with improved profitability.
Exhibit 8: Sufficient capital for next two years
18.0%
16.0%
Rs crs
16.1%
15.4%
13.8%
14.0%
Exhibit 9: Right issue lift tier I by ~582 bps
13.2%
12.0%
12.0%
Pre- Issue Tier I
11.2%
12.0%
10.0%
8.0%
Right issue (Rs crs)
278
Impact on tier I (↑)
5.6%
Post issue Tier I
17.0%
6.0%
4.0%
2.0%
0.0%
FY13
FY14
FY15
FY16E
Source: Company, Nirmal Bang PCG Research
5|Page
FY17E
Board approval for tier II (Rs crs)
300
Impact on CAR (↑)
6.3%
FY18E
Initiating Coverage
Can Fin Homes Ltd
# Diversification of funding: At present, 44% of Can Fin’s borrowing is refinanced by the National Housing
Bank (NHB). Being Canara Bank sponsored financial institution; Can Fin Homes has been able to borrow money
from banks at base rate. The management intends to diversify funding base by increasing share of low cost NCDs
and commercial paper. Five year business plan has a target to increase market borrowing (NCDs & CPs) from 9
per cent to 25 per cent by FY18. We believe rate easing cycle coupled with increasing share of low-cost funding
instruments in overall funding will reduce cost of funds and aid spreads over next few years. We are building
65bps decline in cost of funds from FY15 levels aided by change in mix and impact rate easing cycle on overall
funding costs.
Exhibit 10: Funding profile as on 31st March 2015
9%
Exhibit 11: Instrument wise funding costs marginal basis
(%)
3%
Banks
~ 10.0%
NCDs
~ 8.7%-8.8%
NHB
~7.1%-9.1%
Deposits
~ 8.5%-9.0%
44%
31%
Refinance from NHB
Bank Loans
Market borrowings
Deposits
Weighted avg cost
8.9%
Source: Company, Nirmal Bang PCG Research
# Improving market presence and customer service levels: Can Fin Homes has strong presence in Southern India
market (Karnataka, Tamilnadu, Andhra Pradesh and Telangana). Aggressive branch addition in strategic
locations in key markets like Bangalore, Chennai and Hyderabad has improved market presence and increased
customer acquisition run-rate. The company also reduced loan turnaround time to 7 days and increased other
service features like mobile app for interest certificates, online loan applications and product shows in virtual web
market.
Exhibit 11 Branch network distribution
Source: Company
6|Page
Initiating Coverage
Can Fin Homes Ltd
# Healthy asset quality reflecting strong underwriting practices: Can Fin Homes has witnessed decline in gross
NPAs from 1.1 per cent in FY11 to 0.2 per cent in FY15. Strong loan origination & credit appraisal system and
aggressive write-offs helped to show strong credit quality over the last two years. Provision coverage stands at
100 per cent, the best in class among peers. We believe increasing share of non-housing portfolio will increase
credit costs over the coming years. Hence, we are building 33bps average credit cost over FY15-FY18 vs. 23bps
credit cost in FY15.
RISKS / CONCERNS

Regional concentration: Can Fin Homes originates 70% business in south market and remaining 30%
coming from rest of India. Deep slowdown in south market may affect business growth, asset quality and
earnings materially.

Increased competition in loans against property (LAP) and rural housing finance may affect growth
and earnings adversely: Private sector banks have increased branch network in rural and semi urban
markets significantly over the last two years. Aggressive business push by private sector banks and rural
housing finance companies like Mahindra Rural Housing Finance can lead to lower growth and
profitability for Can Fin Homes.
7|Page
Initiating Coverage
Can Fin Homes Ltd
VALUATION AND RECOMMENDATION
The stock has re-rated on the back of high loan book growth trajectory and improvement in return ratios. Growth
delta, preservation of asset quality and strong earnings growth are primary factors for sharp re-rating in the
valuation multiple in our view. Going ahead, we believe valuation multiple expansion will be contingent upon
sustainability of high loan book growth, further improvement in profitability and stable asset quality especially
Loan Against Property(LAP) book. We expect Can Fin Homes to deliver 39 per cent CAGR in net earnings
supported by 40 per cent CAGR in NII and 31.5 per cent CAGR in loan book over FY15-FY18. RoE will improve
from 14.1 per cent in FY15 to 20.8 per cent in FY18, aided by NIM expansion, stable asset quality and increasing
leverage.
At Rs 810, the stock is trading at 2.1x FY17 book value / 1.8x FY18 book value and 12.8x FY17 earnings / 9.3x
FY18 earnings and looks attractive given the high earning growth and improving return ratios. We value the
company at 2.2x FY18 book value to arrive at a price target of Rs 1000 (potential upside 23.4 per cent). We
recommend a BUY on the stock with a price target of Rs1000 over a 9-12 months’ timeframe.
Exhibit 13: Historical valuation multiple
Exhibit 14: Rolling one year forward price to book band
2.5
Price
0.5 x
1.0 x
Oct-14
Mar-15
May-14
Jul-13
2.0 x
Dec-13
Feb-13
Apr-12
1.5 x
Sep-12
Nov-11
Jan-11
Jun-11
Aug-10
Oct-09
Mar-10
Apr-08
Jul-08
Oct-08
Jan-09
Apr-09
Jul-09
Oct-09
Jan-10
Apr-10
Jul-10
Oct-10
Jan-11
Apr-11
Jul-11
Oct-11
Jan-12
Apr-12
Jul-12
Oct-12
Jan-13
Apr-13
Jul-13
Oct-13
Jan-14
Apr-14
Jul-14
Oct-14
Jan-15
Apr-15
Jul-15
Apr-07
0.0
May-09
0.5
Jul-08
1.0
Dec-08
1.5
Feb-08
2.0
Sep-07
1000
900
800
700
600
500
400
300
200
100
0
2.5 x
Source: ACE Equity, Nirmal Bang PCG Research
Exhibit 15: Relative Valuation
` CRORE
CMP
M Cap
Price to Book
RoE(%)
EPS growth (%)
HDFC Ltd #
1314
207254
FY16
6.0
FY17
5.3
FY16
22.3
FY17
23.8
FY16
17.9
FY17
17.4
LIC Housing
476
24027
2.4
2.1
19.6
20.3
24.8
22.5
Dewan Housing Finance
460
6717
1.3
1.1
15.8
16.6
12.2
21.0
Indiabulls Housing finance
678
24136
3.0
2.6
31.8
33.3
15.7
19.4
REPCO Home Finance
Gruh Finance
675
4215
4.6
3.9
17.9
18.9
27.4
24.0
239
8689
9.8
7.8
32.4
31.4
33.5
24.0
Can Fin Homes Ltd
810
2156
2.3
2.0
15.2%
17.9%
44.6%
34.8%
Source: Bloomberg, Nirmal Bang PCG Research, # Note: Above represents only mortgage business for HDFC Ltd;
8|Page
Initiating Coverage
Can Fin Homes Ltd
FINANCIALS
` Crore
Income Statement
FY14
FY15
FY16E
FY17E
FY18E
Interest income
557.1
787.9
1095.8
1456.9
1886.8
Interest expense
422.8
610.3
834.2
1098.2
1402.6
Net interest income
134.3
177.6
261.7
358.7
484.2
Non interest income
21.0
29.1
30.4
41.1
52.0
Operating income
155.2
206.7
292.0
399.8
536.2
-- Employee cost
17.9
24.8
30.9
38.7
48.3
-- Other operating expenses
22.8
28.2
40.9
55.2
74.5
Operating expenses
40.7
52.9
71.8
93.9
122.8
Pre-provision profit
114.5
153.8
220.2
305.9
413.3
Provisions
7.7
16.3
28.4
47.4
57.6
Exceptional items
-0.2
0.0
0.0
0.0
0.0
Profit before tax
106.7
137.5
191.8
258.5
355.7
Tax expense
30.94
51.21
67.13
90.49
124.51
Net profit
75.7
86.2
124.7
168.0
231.2
Equity dividend
13.3
18.6
21.3
24.0
26.6
Tax on equity dividend
2.3
3.2
3.7
4.1
4.6
Equity share capital
20
27
27
27
27
Reserve & Surplus
432
745
845
985
1184
Shareholders' fund
452
771
871
1011
1211
Borrowings
Balance Sheet
5269
7375
10565
13840
17328
Current liabilities
99
42
57
77
101
Provisions
92
124
168
227
306
Total Liabilities
5912
8334
11661
15155
18946
Net Loans
5874
8302
11623
15109
18887
Investments
15
15
15
15
15
Deferred tax assets
5
0
0
0
0
Cash and Bank balances
9
8
13
18
30
Fixed assets
8
9
11
12
14
Total Assets
5912
8334
11661
15155
18946
9|Page
Initiating Coverage
Can Fin Homes Ltd
Spread analysis
Loan yield
11.2%
11.1%
11.0%
10.9%
11.1%
Borrowing costs
9.6%
9.7%
9.3%
9.0%
9.0%
Spreads
1.6%
1.5%
1.7%
1.9%
2.1%
NIM
2.7%
2.5%
2.6%
2.7%
2.8%
DuPont analysis
FY14
FY15
FY16E
FY17E
FY18E
Net interest income
2.7%
2.5%
2.6%
2.7%
2.8%
Non-interest income
0.4%
0.4%
0.3%
0.3%
0.3%
Operating revenues
3.1%
2.9%
2.9%
3.0%
3.1%
OPEX
0.8%
0.7%
0.7%
0.7%
0.7%
Pre-provision profits
2.3%
2.2%
2.2%
2.3%
2.4%
Provisions
0.2%
0.2%
0.3%
0.4%
0.3%
PBT
2.1%
1.9%
1.9%
1.9%
2.1%
Tax
0.6%
0.7%
0.7%
0.7%
0.7%
PAT
1.5%
1.2%
1.2%
1.3%
1.4%
Leverage
11.8
11.6
12.2
14.2
15.3
18.0%
14.1%
15.2%
17.9%
20.8%
Loan book
45.8%
41.3%
40.0%
30.0%
25.0%
Net interest income
40.3%
32.3%
47.3%
37.1%
35.0%
PAT
39.9%
13.9%
44.6%
34.8%
37.6%
EPS
39.9%
-12.3%
44.6%
34.8%
37.6%
BVPS
15.3%
31.3%
12.9%
16.1%
19.8%
Total assets
45.4%
41.0%
39.9%
30.0%
25.0%
Gross NPAs
0.2%
0.3%
0.4%
0.4%
0.4%
Net NPAs
0.0%
0.0%
0.1%
0.2%
0.2%
Credit costs
0.2%
0.2%
0.3%
0.4%
0.3%
Tier I
13.1%
15.6%
12.7%
11.3%
11.0%
Tier II
0.8%
0.5%
0.5%
0.7%
1.0%
CAR
13.8%
16.1%
13.2%
12.0%
12.0%
ROE
Growth ratios
Asset Quality
Capital Adequacy
10 | P a g e
Initiating Coverage
Can Fin Homes Ltd
Per share data and Valuations
EPS
37.0
32.4
46.8
63.1
86.9
DPS
6.5
7.0
8.0
9.0
10.0
PPOP per share
55.9
57.8
82.7
114.9
155.3
BVPS
220.8
289.8
327.2
379.8
454.9
Price to earnings (x)
21.9
25.0
17.3
12.8
9.3
Price to book (x)
3.7
2.8
2.5
2.1
1.8
Price to PPOP (x)
14.5
14.0
9.8
7.0
5.2
Shareholding pattern
Promoter
FIIs
DIIs
Others
Total
4QFY14
42.4
0.6
0.3
56.7
100.0
1QFY15
42.4
0.6
0.3
56.7
100.0
2QFY15
42.4
0.7
0.4
56.5
100.0
3QFY15
42.4
0.6
0.5
56.5
100.0
4QFY15
42.4
0.1
0.7
55.7
100.0
4QFY14
1QFY15
2QFY15
3QFY15
4QFY15
34
37
41
48
52
Quarterly Earnings
Rs crore
Net interest income
Other income
6
6
9
7
7
OPEX
12
11
11
13
14
Provisions
-1
2
2
3
6
Tax
8
10
10
14
16
Net profit
20
19
19
26
23
Loan book
5844
6355
7037
7634
8231
Borrowings
5268
5751
6416
7033
7375
Total assets
5912
6395
7088
7695
8334
Source: Company, Nirmal Bang PCG Research
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Initiating Coverage
Can Fin Homes Ltd
Company background
Head office in Bangalore, Can Fin Homes is a 26-year old housing finance company registered with the NHB. The
company was incorporated by Canara Bank in 1987, which owns 42.4% shareholding of Can Fin Homes. The
company offers a range of products on housing, such as loans for home purchase, home construction, home
improvement/extension and site purchase as well as non-housing finance. It predominantly lends to individuals
(93% of loans). It has a pan-India presence with 106 branches in over 19 states, of which, 65 were added in the
past three years. Further, above 80% of its branches are located in tier 1 and 2 cities. Can Fin Homes enjoys a 5Star rating from NHB in refinancing and MAA+ rating from ICRA for long-term financing from banks.
Change in leadership led positive change across business operations
“Can Fin Homes appoints additional director & MD with effect from 29 April 2011 The board of Can Fin Homes
has appointed C Ilango, deputy general manager, Canara Bank as additional director of the company with effect
from 29 April 2011. Further, the board has appointed C Ilango as managing director of the company with effect
from 29 April 2011” – (Source: Press release)
With the change in leadership, the management has been able put back the company into high growth trajectory
with profitability focus. Consequently, the company has clocked 39 per cent CAGR growth loan book which
leading to 29.9 per cent CAGR in net interest income over FY11-FY15.
Recent capital raising will be sufficient for next few years
The company has raised Rs278 crs equity capital through rights issue recently. We believe the company’s capital
positioning is more than comfortable to grow business faster than sector.
Exhibit 16: Robust loan book growth
Exhibit 17: Highest domestic credit rating
(%)
8231
Deposits
5844
4016
Loans – long term
ICRA AAA
Secured NCDs
ICRA AAA
Unsecured NCDs
ICRA AAA
Commercial Paper
ICRA A1+
FY15
FY14
FY13
Source: Company,
Top Management
1
2
4
K.N.Prithviraj
C. Ilango
T. V. Rao
Source: Company
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MAAA
2674
FY12
2208
FY11
2107
FY10
1887
FY09
INR Crs
Loan book
9000
8000
7000
6000
5000
4000
3000
2000
1000
0
Designation
Chairman
Managing Director
Director
Previous Occupation
Former CMD – OBC
GM – Canara Bank
Director – (E.C.) EXIM Bank
Initiating Coverage
Can Fin Homes Ltd
Disclaimer
Nirmal Bang Securities Private Limited (hereinafter referred to as “NBSPL ”) is a registered Member of National Stock
Exchange of India Limited, Bombay Stock Exchange Limited and MCX stock Exchange Limited. NBSPL is in the process
of making an application with SEBI for registering as a Research Entity in terms of SEBI (Research Analyst) Regulations,
2014.
NBSPL or its associates including its relatives/analyst do not hold any financial interest/beneficial ownership of more than
1% in the company covered by Analyst.
NBSPL or its associates/analyst has not received any compensation from the company covered by Analyst during the past
twelve months.
NBSPL /analyst has not served as an officer, director or employee of company covered by Analyst and has not been
engaged in market making activity of the company covered by Analyst.
The views expressed are based solely on information available publicly and believed to be true. Investors are advised to
independently evaluate the market conditions/risks involved before making any investment decision.
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