Can Fin Homes Limited — Q1 FY27 earnings call

Call held 20 Jul 2026

Management summary

Can Fin Homes reported a robust Q1 FY27, surpassing disbursement targets and improving AUM growth. The company successfully maintained strong NIMs and managed its cost of borrowing effectively, while keeping credit costs low. A significant IT transformation is underway, with a full rollout planned for Q2 FY27. However, increased rundowns due to part prepayments and competitive interest rate differentials present challenges for AUM accretion and customer retention, which management is actively addressing.

Highlights

  • Disbursements in Q1 FY27 reached INR2,609 crores, exceeding the projected INR2,500 crores.

  • AUM growth improved to 10.8% in Q1 FY27 from 10.4% last year, adding INR755 crores to the book.

  • Net Interest Margin (NIM) was maintained at 3.81%, surpassing the guidance of 3.75%.

  • Cost of borrowing reduced to 6.98% in Q1 FY27 from a projected 6.99%, driven by strategic debt management.

  • Credit cost remained marginal, with NPA increase in Q1 FY27 limited to INR17-18 crores, significantly lower than INR45 crores in Q1 last year.

  • IT transformation pilot in 5 branches successfully completed with no major business impact, with full rollout planned for Q2 FY27.

Concerns

  • Rundown increased to INR1,857 crores in Q1 FY27, primarily due to higher part prepayments of INR1,072 crores, impacting AUM accretion.

  • The widening interest rate differential, now exceeding 1 percentage point, between Can Fin Homes and banks poses a challenge for customer retention.

  • While IT implementation is on track, scaling the rollout to 245 branches will require careful handholding, potentially affecting productivity temporarily.

Key financials

  1. Disbursements ₹2,609 Cr +29%YoY
  2. AUM Growth 10.8%
  3. Yield 9.8%
  4. Cost of Borrowing 7%
  5. Spread 2.8%
  6. NIM 3.8%
  7. ROA 2.4%
  8. ROE 18%
  9. Cost-to-Income Ratio 19.5%
  10. Rundown ₹1,857 Cr
  11. Part Prepayments ₹1,072 Cr
  12. NPA Increase Q1 FY27 ₹17 Cr
  13. Cumulative Write-offs (since 2001) ₹20 Cr

What they filed

Q1 FY27: revenue up 7.5%, net profit up 19.6% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue962 986 999 1,020 1,049 +9%1,073 +9%1,074 +8%1,096 +7%
Net profit211 212 234 224 251 +19%265 +25%346 +48%268 +20%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

  • Housing Loans
    ₹1,650 Cr Disbursement Q1 FY2728% Growth Q1 FY27 YoY
  • Non-Housing Loans
    ₹958 Cr Disbursement Q1 FY2732% Growth Q1 FY27 YoY
  • Salaried Segment
    21% Disbursement Growth Q1 FY27 YoY
  • SENP Segment
    44% Disbursement Growth Q1 FY27 YoY

Guidance & targets

Disbursements

  • Disbursements Q2 FY27 Disbursements · Q2 FY27 · High confidence INR3,000 crores
    As of now, we are projecting for INR3,000 crores only, but we will be pushing for seeing that we cover up for the higher rundown.

    — Suresh Iyer, MD and CEO

  • Disbursements Q3 FY27 Disbursements · Q3 FY27 · High confidence INR3,500 crores
    in Q1, we'll be doing INR2,500 crores; Q2, INR3,000 crores and INR3,500 crores and INR4,000 crores in the third and fourth quarters and so on.

    — Suresh Iyer, MD and CEO

  • Disbursements Q4 FY27 Disbursements · Q4 FY27 · High confidence INR4,000 crores

    — Suresh Iyer, MD and CEO

  • Disbursement Full Year FY27 Disbursements · FY27 · Medium confidence INR13,000 crores (potentially INR13,200-13,400 crores)
    If that means we'll have to push a little more in terms of disbursement, INR13,000 crores will become INR13,200 crores, INR13,400 crores or whatever. We will try to push for that.

    — Suresh Iyer, MD and CEO

AUM Growth

  • AUM Growth FY27 AUM Growth · FY27 · High confidence 14%
    So the projection for the entire year, we continue to have as 14% AUM growth is what we will be targeting.

    — Suresh Iyer, MD and CEO

NIM

  • NIM FY27 NIM · FY27 · High confidence 3.81% plus
    So, we are confident that the NIM will be maintained at 3.81% plus and we should not have a problem in that.

    — Suresh Iyer, MD and CEO

Credit Cost

  • Credit Cost FY27 Credit Cost · FY27 · High confidence 10 basis points
    we should be able to maintain our credit cost guidance of 10 basis points.

    — Suresh Iyer, MD and CEO

Cost-to-Income Ratio

  • Cost-to-Income Ratio FY27 Cost-to-Income Ratio · FY27 · High confidence ~19.5%
    Current year we do envisage that it will be hovering around 19.5% cost-to-income ratio.

    — Suresh Iyer, MD and CEO

  • Cost-to-Income Ratio Long-term Cost-to-Income Ratio · in three years · Medium confidence 18%
    I guess, we would in another three years down the line, we would again would want to bring it to 18% or thereabouts.

    — Suresh Iyer, MD and CEO

Accretion to Book

  • Accretion to Book FY27 Accretion to Book · by year-end · High confidence INR6,000 crores
    I think, we will be able to do that, a INR6,000 crores accretion to the book by the end of the year.

    — Suresh Iyer, MD and CEO

Profitability

  • ROA FY27 Profitability · FY27 · High confidence 2.4%
    the company has indicated an aspiration to deliver around 2.4% ROA and around 18% of ROE.

    — Suresh Iyer, MD and CEO

  • ROE FY27 Profitability · FY27 · High confidence 18%

    — Suresh Iyer, MD and CEO

Tax Rate

  • Tax Rate FY27 Tax Rate · FY27 · High confidence 21%
    Yes, 21% because of some DTA benefits, and this will be stable rate. There are no major surprises coming in the next quarters.

    — Abhishek Mishra, CFO

IT Implementation

  • IT Implementation Rollout IT Implementation · before next quarter's earnings call (Q2 FY27) · High confidence Complete across all 245 branches
    definitely before the next quarter's earnings call, we will be done with all the 250 branches.

    — Suresh Iyer, MD and CEO

What to watch in Q2 FY27

IT implementation rollout progress

Before next quarter's earnings call (Q2 FY27)
Current 5 pilot branches implemented
Target All 245 branches implemented

Why it matters

Successful and timely rollout is crucial for operational efficiency, scalability, and enabling new product launches.

we plan to, in fact, implement it across our remaining 245 branches in this current quarter only. And so definitely before the next quarter's earnings call, we will be done with all the 250 branches.

Risks & concerns

  • Higher rundown due to part prepayments

    medium

    Rundown increased to INR1,857 crores in Q1 FY27, primarily due to higher part prepayments of INR1,072 crores, impacting AUM accretion.

    Management acknowledged

  • Competition and widening interest rate differential

    medium

    The interest rate differential with banks has widened to over 1 percentage point, making customer retention challenging.

    Management acknowledged

  • IT implementation challenges during rollout

    low

    While the pilot was successful, scaling the IT system to 245 branches requires careful handholding, though management is confident of minimal disruption.

    Management acknowledged

Q&A highlights

8 direct
Impact of macros and underwriting changes on asset quality. Direct
we are at least not seeing any slowdown in the demand. And we are not seeing any major issues either in the project launches also... we've added another 60 APF projects also... 82% of our loans are now having a CIBIL score of more than 700.

Management confirms resilience in demand and asset quality despite macro uncertainties, highlighting improved customer selection and project additions.

Asked by Shreepal Doshi

IT implementation timeline and business impact. Direct
we have done a pilot of 5 branches... all of them on 8th of July... we plan to, in fact, implement it across our remaining 245 branches in this current quarter only... definitely before the next quarter's earnings call, we will be done with all the 250 branches.

Provides a clear timeline for the critical IT transformation and expresses confidence in minimal business disruption, crucial for future efficiency.

Asked by Shreepal Doshi

Pricing strategy for higher ticket sizes and blended yield. Direct
For a salaried customer, who is having a CIBIL score of more than 725 and who is probably looking for a loan of 25 lakh plus... the best rate would be around 8.4%, but then it goes up to around 11%... anywhere between 8.4 to around 12.5 would be the range, when blended comes to 9.8.

Clarifies the company's dynamic pricing model based on customer profile and loan size, explaining how they manage blended yields.

Asked by Rajiv Mehta

Low historical write-offs and underlying processes. Direct
total write-offs also, that is up to INR20 crores only from the last 20-25 years. That is correct... we've been a it has been a very safe lending, conservative policies, conservative lending has been followed.

Highlights the company's strong credit underwriting and risk management practices over decades, which have resulted in exceptionally low cumulative write-offs.

Asked by Kunal Dhokas

Elevated rundown numbers and strategies for customer retention. Direct
The major challenge or the major portion from where our run down is happening is actually amortization and more importantly, part prepayment... we will want to work on whether we can convert some of these customers into deposit customers for us or else if we can look at some other kind of a thing where they can be retained without having to prepay and move out.

Identifies a key challenge impacting AUM growth and outlines proactive measures being explored to mitigate customer churn due to prepayments.

Asked by Sonal

Competition from Bajaj Housing Finance and LIC, and Can Fin's competitive strategy. Direct
Bajaj definitely has had a technology advantage... we are catching up and we have all just implemented our transform... LIC also has an issue of large prepayments, much higher prepayments because they are directly in competition with on pure home loans with the banks.

Provides insights into the competitive landscape, acknowledging Bajaj's tech advantage while asserting Can Fin's efforts to catch up, and highlighting LIC's vulnerability to prepayments.

Asked by Sonal

Potential for launching higher-yield products with the new IT system. Direct
our system, what we are now implementing definitely gives us the chance or gives us the opportunity to launch these kind of products faster with proper controls and all those things in place, workflows and decision engines and all those things in place.

Indicates a strategic direction towards product diversification and potentially higher-margin offerings, enabled by the new technology platform.

Asked by Sonal

Productivity benefits from CBS platform and branch expansion on cost/income ratio. Direct
this year itself, we should start seeing some benefits in terms of staffing itself. Not to mention the speed and better quality, more faster TAT... we might be able to or we in fact, intend to take all the sales -- additional sales people from within the existing team sizes only.

Explains how the IT transformation and branch strategy are expected to yield operational efficiencies, particularly in staffing and sales productivity, impacting the cost-to-income ratio.

Asked by Prachi

3 min read 7 chapters

Detailed narrative

Q1 FY27 Performance Overview

Can Fin Homes Limited reported a strong start to FY27, with disbursements exceeding projections and AUM growth showing an upward trend. Disbursements for Q1 FY27 reached INR2,609 crores, surpassing the projected INR2,500 crores. This growth was broad-based across all six zones, with the salaried segment growing 21% and the self-employed non-professional (SENP) segment growing 44%. Overall disbursement growth stood at 29% year-on-year compared to INR2,015 crores in Q1 FY26.

Disbursements and AUM Growth

The company's AUM growth for Q1 FY27 was 10.8%, an improvement from 10.4% in the previous year, with INR755 crores added to the book. Management reiterated a full-year AUM growth target of 14%. However, the quarter saw a higher rundown of INR1,857 crores, primarily driven by increased part prepayments of INR1,072 crores, which management attributes to customers reducing their loan tenures due to interest rate resets.

Asset Quality and Credit Costs

Asset quality remained resilient, with Stage 2 and Stage 3 delinquencies decreasing in absolute terms compared to March 2026. While there was a marginal increase in NPA of INR17-18 crores in Q1 FY27, this was compensated by reductions in SMA 1 and SMA 2. The company maintained its credit cost guidance of 10 basis points for the year, noting that NACH bounce rates have been consistently declining for the past six quarters, and 82% of loans now have a CIBIL score above 700.

NIM and Cost of Borrowing

Can Fin Homes successfully maintained its yield at 9.81% throughout the quarter, as anticipated. The cost of borrowing was managed effectively, coming in at 6.98% against a projected 6.99%, aided by the repayment of high-cost NCDs and timely CP fund raises. This resulted in a spread of 2.83% (vs 2.81% projected) and a Net Interest Margin (NIM) of 3.81%, exceeding the initial guidance of 3.75%.

IT Transformation and Operational Efficiency

The company is undergoing a significant IT transformation, with a pilot implementation in 5 branches successfully completed on July 8, 2026. Management expressed confidence in rolling out the new LOS, LMS, and report generation systems across all 245 remaining branches within Q2 FY27, before the next earnings call. This transformation is expected to enhance operational efficiency, speed, and quality, with initial benefits in staffing productivity anticipated this year, contributing to a long-term cost-to-income ratio target of 18% in three years.

Rundown Management and Customer Retention

A key challenge identified was the higher rundown, largely due to customers making increased part prepayments to reduce their interest burden. Management is actively exploring strategies to mitigate this, including converting these customers into deposit holders or implementing other retention mechanisms. The widening interest rate differential with banks, now exceeding 1 percentage point, also poses a challenge in retaining customers, prompting tweaks to internal guidelines for special rates on loans above INR25 lakhs.

Outlook and Guidance

For FY27, the company targets quarterly disbursements of INR3,000 crores for Q2, INR3,500 crores for Q3, and INR4,000 crores for Q4, aiming for a full-year disbursement of INR13,000 crores, potentially pushing to INR13,200-13,400 crores. They project an ROA of 2.4% and an ROE of 18% for the full year, with the cost-to-income ratio expected to be around 19.5%, targeting 18% in three years. The tax rate is guided at a stable 21% for FY27.

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