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CANFINHOME - Fundamental Analysis: Financial Health & Valuation

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Rating: 4.3

Last Updated Time : 02 Feb 26, 01:08 pm

Fundamental Rating: 4.3

Stock Code CANFINHOME Market Cap 12,022 Cr. Current Price 898 ₹ High / Low 972 ₹
Stock P/E 12.3 Book Value 410 ₹ Dividend Yield 1.34 % ROCE 9.34 %
ROE 18.2 % Face Value 2.00 ₹ DMA 50 902 ₹ DMA 200 832 ₹
Chg in FII Hold 0.72 % Chg in DII Hold 0.82 % PAT Qtr 265 Cr. PAT Prev Qtr 251 Cr.
RSI 46.8 MACD -1.76 Volume 92,613 Avg Vol 1Wk 1,45,794
Low price 558 ₹ High price 972 ₹ PEG Ratio 0.56 Debt to equity 6.61
52w Index 82.3 % Qtr Profit Var 24.8 % EPS 73.2 ₹ Industry PE 16.7

📊 Financials: Can Fin Homes demonstrates consistent profitability with quarterly PAT rising to 265 Cr from 251 Cr. ROE at 18.2% is strong, reflecting shareholder value creation, though ROCE at 9.34% shows moderate efficiency. Debt-to-equity ratio of 6.61 is high, typical for housing finance firms, but manageable given stable earnings. EPS of 73.2 ₹ supports valuation strength.

💹 Valuation: Current P/E of 12.3 is below industry average (16.7), suggesting undervaluation. P/B ratio ~2.2 (Price 898 ₹ / Book Value 410 ₹) is reasonable. PEG ratio of 0.56 highlights attractive growth-adjusted valuation. Dividend yield of 1.34% provides steady income.

🏢 Business Model: Specializes in affordable housing finance, with strong retail loan focus. Backed by Canara Bank, ensuring credibility and funding support. Competitive advantage lies in niche positioning and consistent loan book expansion.

📈 Entry Zone: Attractive accumulation zone between 850–880 ₹, near DMA200 (832 ₹). RSI at 46.8 indicates neutral momentum, while MACD (-1.76) suggests mild bearishness. Long-term investors can accumulate gradually.

🔒 Holding Guidance: Fundamentally strong, undervalued relative to peers, and positioned well in housing finance. Suitable for long-term holding, with monitoring of debt levels and interest rate trends.

Positive

  • Strong ROE of 18.2% ensures shareholder value creation.

  • Quarterly PAT growth of 24.8% indicates earnings momentum.

  • Undervalued compared to industry P/E, PEG ratio attractive.

  • Dividend yield of 1.34% adds stability.

  • Institutional confidence with FII (+0.72%) and DII (+0.82%) increases.

Limitation

  • High debt-to-equity ratio (6.61) increases leverage risk.

  • ROCE at 9.34% is relatively modest.

  • Trading volumes are moderate, which may affect liquidity.

Company Negative News

  • No major negative news reported, but leverage remains a structural concern.

Company Positive News

  • Consistent profit growth with quarterly PAT increase.

  • Improved institutional holdings reflect market confidence.

  • Strong demand in affordable housing finance sector.

Industry

  • Housing finance sector benefits from government initiatives for affordable housing.

  • Industry P/E at 16.7 suggests sector optimism.

  • Urbanization and middle-class demand drive long-term growth.

Conclusion

✅ Can Fin Homes is fundamentally strong, undervalued relative to peers, and well-positioned in the housing finance sector. Despite high leverage, strong ROE and earnings growth make it a promising long-term investment. Accumulation near 850–880 ₹ is recommended for patient investors.

Would you like me to also calculate an intrinsic value estimate using discounted cash flow (DCF) assumptions so you can compare it with the current market price?

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