CANFINHOME - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 20 Dec 25, 11:15 pm

Fundamental Rating: 3.8

📊 Core Financials

• Quarterly PAT improved from 224 Cr. to 251 Cr. (+18.9%), showing healthy earnings growth.
• ROE at 18.2% indicates strong shareholder returns, while ROCE at 9.34% reflects moderate efficiency.
• Debt-to-equity ratio of 6.61 highlights high leverage, typical for housing finance companies but a risk factor.
• Dividend yield at 1.32% provides decent shareholder returns.

💹 Valuation Indicators

• P/E Ratio: 13.4 vs Industry PE of 18.0 → Undervalued compared to peers.
• P/B Ratio: Current Price / Book Value ≈ 2.27 → Reasonably priced relative to assets.
• PEG Ratio: 0.61 → Suggests attractive growth potential at current valuation.
• Intrinsic Value Zone: ₹880–₹920 (near DMA 200).

🏭 Business Model & Competitive Advantage

• Core operations in housing finance, catering to salaried and self-employed individuals.
• Strong presence in affordable housing loans with a wide branch network.
• Competitive advantage lies in niche focus on housing finance and consistent profitability.

📈 Entry Zone & Long-Term Guidance

• Entry Zone: Attractive accumulation between ₹880–₹920.
• Long-Term Holding: Suitable for investors seeking exposure to housing finance growth, but leverage risk must be considered.

✅ Positive

• Strong ROE (18.2%) and consistent profitability.
• Quarterly PAT growth (+18.9%).
• Undervalued compared to industry PE.
• Increase in FII holdings (+0.42%).

⚠️ Limitation

• High debt-to-equity ratio (6.61) increases financial risk.
• ROCE at 9.34% indicates moderate efficiency.
• Reduction in DII holdings (-0.65%).

📉 Company Negative News

• High leverage raises concerns about financial stability.
• Decline in domestic institutional investor confidence (-0.65%).

📈 Company Positive News

• Quarterly PAT improved to 251 Cr. from 224 Cr.
• EPS at ₹69.2 indicates strong earnings base.
• Increase in foreign institutional investor confidence (+0.42%).

🌐 Industry

• Housing finance sector driven by government initiatives in affordable housing and rising urban demand.
• Industry PE at 18.0 indicates moderate valuation compared to Can Fin Homes’ discount.
• Sector outlook supported by mortgage growth and housing demand in India.

🔎 Conclusion

• Can Fin Homes is financially strong with attractive valuation and consistent earnings growth.
• High leverage remains a key risk factor, though typical for housing finance companies.
• Accumulation recommended near ₹880–₹920 for favorable long-term exposure to housing finance growth.