Detailed Narrative
Record Disbursements and AUM Growth Trajectory
Can Fin Homes achieved record disbursements of INR 2,727 crores in Q3 FY26, marking a 45% year-on-year increase and a 7% sequential growth over Q2. This strong performance positions the company to meet its full-year disbursement guidance of INR 10,500 crores, with a Q4 target of INR 3,200-3,300 crores. AUM growth inched up from 8.4% to over 9.5%, and is projected to reach 11-12% for FY26, and 15% for FY27, despite the impact of higher prepayments.
Improving Asset Quality and Delinquency Trends
The company reported an improvement in delinquency numbers for the fourth consecutive quarter, with total delinquency falling below INR 3,750 crores from INR 3,860 crores in Q2. SMA-0, SMA-1, and SMA-2 categories all showed a downward trend. Notably, the Telangana portfolio, previously a concern, also saw an improvement in delinquencies in Q3. Management is confident in maintaining GNPA below 1% in the medium term, with salaried segment GNPA at 0.5-0.6% and self-employed at 1.5-1.7%.
NIM Expansion and Rate Transmission Strategy
Net Interest Margin (NIM) for Q3 FY26 increased to 4.14% from 4.02% in Q2, and the 9-month spread stood at 2.83%. The company has cumulatively passed on 50 basis points of rate benefits to customers, including a recent 15 bps cut effective January 1, 2026. To manage rate transmission and reduce prepayments, Can Fin Homes is aggressively converting annual reset loans (currently 54%) to quarterly reset, aiming for 80-85% by Q4 FY26.
IT Transformation Progress and Future Impact
Can Fin Homes has successfully implemented HRMS, DMS, and Aadhar Data Vault modules. The deposit module is in UAT and expected to go live by January end. However, the LOS and LMS modules are delayed, now anticipated by February end or Q1 next year. Management expects 3-4 days of downtime and 1-2 weeks for staff adaptation during implementation, potentially impacting disbursements by INR 250-300 crores in that month. The transformation aims for 20% productivity improvement, faster turnaround times, and enhanced security.
Branch Expansion and Marketing Executive Growth
The company plans to expand its branch network from 249 to 300 by FY28, opening approximately 25 new branches annually, primarily in North, West, Tamil Nadu, and East (AP). The number of marketing executives, which grew from 37 in Q1 to 90 in Q3, is targeted to increase to 150-odd next year and 250-odd by FY28. These executives sourced over INR 250 crores in Q3, contributing INR 80-90 lakh per staff per month.
Geographical Performance and Sourcing Mix Diversification
Most geographies, excluding Telangana and Karnataka, showed over 25% AUM growth. Karnataka's YTD disbursement growth turned positive at 3%, with a target of 10% by year-end. Telangana also saw a 30% YoY disbursement growth in Q3 and is expected to achieve positive YTD growth by year-end. The company aims to reduce DSA contribution from the current 78-79% to 60% by increasing its internal sales team and leveraging digital onboarding post IT transformation.