CANFINHOME - Investment Analysis: Buy Signal or Bull Trap?
Back to ListInvestment Rating: 4.3
| Stock Code | CANFINHOME | Market Cap | 12,550 Cr. | Current Price | 940 ₹ | High / Low | 972 ₹ |
| Stock P/E | 12.9 | Book Value | 410 ₹ | Dividend Yield | 1.28 % | ROCE | 9.34 % |
| ROE | 18.2 % | Face Value | 2.00 ₹ | DMA 50 | 904 ₹ | DMA 200 | 835 ₹ |
| Chg in FII Hold | 0.72 % | Chg in DII Hold | 0.82 % | PAT Qtr | 265 Cr. | PAT Prev Qtr | 251 Cr. |
| RSI | 56.2 | MACD | 2.10 | Volume | 1,42,653 | Avg Vol 1Wk | 3,05,482 |
| Low price | 558 ₹ | High price | 972 ₹ | PEG Ratio | 0.58 | Debt to equity | 6.61 |
| 52w Index | 92.4 % | Qtr Profit Var | 24.8 % | EPS | 73.2 ₹ | Industry PE | 16.4 |
📊 Analysis: CANFINHOME shows strong fundamentals with a low P/E (12.9 vs industry 16.4), healthy ROE (18.2%), and attractive PEG ratio (0.58). The dividend yield of 1.28% adds stability, though ROCE (9.34%) is modest. Debt-to-equity at 6.61 is high, reflecting sector leverage. Technicals show price above DMA 50 (904 ₹) and DMA 200 (835 ₹), indicating bullish momentum. RSI at 56.2 suggests neutral-to-positive strength. Quarterly PAT growth (24.8%) supports earnings momentum.
💰 Ideal Entry Zone: Between 880 ₹ – 910 ₹ (near DMA 50 support and valuation comfort). Current price (940 ₹) is slightly above fair entry, so staggered buying is recommended.
📈 Exit / Holding Strategy: For long-term investors already holding, maintain positions given strong ROE, PEG, and earnings growth. Exit only if price sustains below 835 ₹ (DMA 200) or if debt metrics worsen. Holding period: 3–5 years for compounding, with periodic review of debt levels and industry growth.
Positive
- Strong ROE (18.2%) and EPS (73.2 ₹)
- PEG ratio of 0.58 indicates undervaluation relative to growth
- Consistent PAT growth (265 Cr. vs 251 Cr.)
- Price trend above DMA 200 and DMA 50 supports bullish outlook
Limitation
- High debt-to-equity ratio (6.61) increases financial risk
- ROCE (9.34%) is below ideal levels for long-term compounding
- Trading volume lower than 1-week average, showing reduced liquidity
Company Negative News
- High leverage remains a concern in rising interest rate environments
- Moderate dividend yield compared to peers
Company Positive News
- Quarterly profit growth of 24.8% shows strong operational performance
- Institutional investors (FII + DII) increased holdings
Industry
- Housing finance sector remains in growth phase, supported by demand for affordable housing
- Industry P/E at 16.4 indicates CANFINHOME trades at a discount
Conclusion
✅ CANFINHOME is a fundamentally strong candidate for long-term investment, with attractive valuations and growth metrics. Ideal entry is near 880–910 ₹. Long-term holders should continue to hold for 3–5 years, monitoring debt levels and industry trends.