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    Can Fin Homes Limited

    CANFINHOME
    Financial Services·20 Jan 2026
    Management Summary

    Can Fin Homes reported strong Q3 FY26 disbursements, reaching a record INR2,727 crores, driven by robust growth across most geographies. Asset quality continued to improve for the fourth consecutive quarter, with declining delinquency numbers. While NIMs saw a slight increase due to timing, higher prepayments and delays in key IT module implementation pose challenges to AUM growth and Q4 disbursements, respectively.

    Highlights

    5

    • Disbursements for Q3 FY26 reached INR2,727 crores, a 45% increase over the corresponding quarter last year and 7% sequential growth over Q2.

    • AUM growth inched up from 8.4% to 9.5%+, indicating approximately 10% AUM growth for the year.

    • Delinquency numbers improved for the fourth consecutive quarter, with SMA numbers decreasing, and Telangana showing improvement for the first time in 6-7 quarters.

    • Karnataka disbursements moved into positive YTD growth (3%) after being negative 10% YTD in the previous quarter.

    • NIMs slightly increased to 4.14% in Q3 from 4.02% in Q2, attributed to a timing difference in rate transmission.

    Concerns

    3

    • Higher prepayments and loan closures, totaling INR1,691 crores in Q3, impacted AUM growth by approximately INR400 crores in Q2 and Q3.

    • Delay in the completion of LOS and LMS IT modules, pushing the deadline to Q1 FY27, potentially impacting Q4 FY26 disbursements by INR250-300 crores.

    • AUM growth of 11-12% for FY26 is lower than the initial guidance of 12-13% and below the industry average of 13-14%.

    Key financials

    Single quarter

    11 metrics
    1. 01Disbursements Q3 FY26₹2,727 Cr+45%YoY
    2. 02AUM Growth9.5%
    3. 03Total Delinquency Q3 FY26₹3,750 Cr
    4. 04Provision Q3 FY26₹10 Cr
    5. 05NIM Q3 FY264.1%+3.0%QoQ

    Segment breakdown

    AP and East
    11% AUM Growth
    Karnataka
    8% AUM Growth
    North and West
    15% AUM Growth
    Tamil Nadu
    15% AUM Growth
    Telangana
    0% AUM Growth
    List

    Guidance & targets

    15
    CategoryTargetPriority
    AUM Growth
    AUM Growth FY26
    11-12%
    		Medium
    AUM Growth
    AUM Growth FY27
    15%
    		High
    AUM Growth
    AUM Growth vs. Industry
    2 percentage points above industry
    		Medium
    Disbursements
    Disbursements Q4 FY26
    INR3,200-3,300 crores
    		High
    Disbursements
    Disbursements FY26
    INR10,500 crores
    		High
    Disbursements
    Disbursements FY27
    INR13,500 crores
    		High
    Profitability
    NIM
    3.75-3.80%
    		High
    Profitability
    Spread
    2.75-2.80%
    		High
    Asset Quality
    Credit Cost
    15 bps
    		High
    Asset Quality
    GNPA
    Below 1%
    		High
    Operating Efficiency
    Cost-to-Income Ratio
    19.5%
    		High
    Branch Network
    Total Branches
    300
    		High
    Headcount
    Marketing Executives
    250
    		High
    Loan Mix
    Self-Employed Segment Share
    35%
    		High
    Sourcing Mix
    DSA Contribution
    60%
    		High

    What to watch in Q4 FY26

    5

    LOS/LMS IT Implementation Status

    Q1 FY27
    CurrentTesting almost done, expected Q1 FY27 go-live
    TargetGo-live and stabilization of LOS/LMS modules

    Why it matters

    Completion is key for digital sourcing, operational efficiency, and achieving higher growth targets.

    So that leaves only the LOS, LMS, where the deadline was January, and 19th of January was what has been given by our partner, but there are some delays in the deadline. So I expect that it might end up around February end or something. In which case, we are inclined to actually push it into Q1 of next year.

    Risks & concerns

    4
    RiskSeverity

    Higher prepayments impacting AUM growth

    Prepayments of INR1,691 crores in Q3, impacting AUM growth by INR400 crores in Q2 and Q3, attributed to annual reset customers not benefiting immediately from rate cuts and some customers seeking higher top-ups elsewhere. — Management acknowledged

    medium

    Delay in LOS/LMS IT module implementation

    LOS and LMS modules expected to go live in Q1 FY27 instead of January 2026 due to delays, with a potential impact of INR250-300 crores on disbursements in the implementation month. — Management acknowledged

    low

    AUM growth lagging industry average

    AUM growth of 11-12% for FY26 is below the industry average of 13-14%, partly due to INR400 crores lost to prepayments and a conscious conservative growth strategy. — Analyst acknowledged

    medium

    Potential NIM/Spread compression

    Concerns raised about PLR cuts, asset repricing, and borrowing mix, but management expects NIMs to stabilize at 3.75-3.80% and spreads at 2.75-2.80% due to liability side benefits and rate transmission. — Analyst acknowledged

    medium

    Q&A highlights

    8

    “Because if it was because at least when our customers do appreciate that we have passed on 50 basis points and we have regularly -this is the fourth rate cut that we are passing on to the to our customers. But what has happened is the annual customers don't get the entire benefit. They have to wait for that 1-year period.”

    Explains the rationale behind aggressive rate cuts (50 bps cumulatively) and the challenge of high prepayments from annual reset customers who don't immediately benefit from rate reductions.

    asked by Shreepal Doshi

    2 min read6 chapters

    Detailed Narrative

    01

    Q3 FY26 Performance Highlights

    Can Fin Homes Limited reported its highest-ever quarterly disbursements in Q3 FY26, reaching INR2,727 crores, a 45% year-on-year increase and 7% sequential growth. This strong performance contributed to an AUM growth of over 9.5% for the year, despite challenges. The company also noted a fourth consecutive quarter of improved delinquency numbers, with SMA figures decreasing across all geographies, including Telangana which showed improvement after 6-7 quarters.

    02

    Asset Quality and Delinquency Management

    The company's total delinquency reduced to below INR3,750 crores in Q3 FY26 from INR3,860 crores in Q2 FY26, primarily driven by improvements in SMA-0. Current GNPA stands at 0.92%, with management confident of keeping it below 1% and expecting further reduction in Q4. Salaried segment GNPA is maintained at 0.5-0.6%, while the self-employed segment is 1.5-1.7%. A provision of INR10 crores was made in Q3, mainly due to book size increase.

    03

    Interest Rate Transmission and Margins

    NIMs for Q3 FY26 increased to 4.14% from 4.02% in Q2, attributed to timing difference📎s in rate transmission. The company has passed on a cumulative 50 basis points rate benefit to customers, with 10 bps in December and 15 bps in January, following RBI rate cuts. Management expects NIMs to stabilize around 3.75-3.80% and spreads around 2.75-2.80% going forward⏳, factoring in liability side benefits and NHB refinance.

    04

    IT Transformation Progress and Impact

    Can Fin Homes has completed and implemented several IT modules, including HRMS, DMS, and Aadhar Data Vault. The Deposit module is expected to go live by the end of January, while the critical LOS (Loan Origination System) and LMS (Loan Management System) modules have seen delays, with the deadline pushed to Q1 FY27. This delay is anticipated to cause a 3-4 day downtime and a potential impact of INR250-300 crores on disbursements in the month of implementation.

    05

    Growth Strategy and Sourcing Mix

    The company aims for FY26 disbursements of INR10,500 crores, with Q4 expected to contribute INR3,200-3,300 crores. For FY27, the disbursement target is INR13,500 crores, leading to an AUM growth of 15%. To diversify its sourcing mix and reduce reliance on DSAs (currently 78-79%), the company plans to increase its in-house sales team to 250 by FY28 and leverage digital onboarding and lead aggregators post IT transformation. The self-employed segment is targeted to increase to 35% by FY28 from 31% currently.

    06

    Branch Expansion and Geographic Focus

    Can Fin Homes plans to expand its branch network to 300 by FY28 from the current 249, opening approximately 25 branches annually. The expansion will primarily focus on North, West, Tamil Nadu, and East zones, with some potential for Karnataka. The strategy involves going deeper into existing geographies, with new branches typically within 60-70 kilometers of an existing one, rather than entering entirely new regions.

    This is an AI-generated summary of a publicly available earnings call transcript. It is for informational purposes only and does not constitute investment advice, a recommendation, or an endorsement. inve.money is not a SEBI-registered investment advisor. Please consult a qualified financial advisor before making any investment decisions.