Can Fin Homes Limited — Q4 FY26 earnings call

Call held 27 Apr 2026

Management summary

Can Fin Homes reported strong Q4 and FY26 results, exceeding disbursement guidance and improving asset quality. The company successfully transitioned 85% of its portfolio to quarterly resets, aiming for stable spreads and NIMs in FY27. While AUM growth was slightly below target due to higher rundowns, management outlined aggressive plans for FY27, including 14% AUM growth, significant branch expansion, and sales team growth, despite anticipated elevated IT costs.

Highlights

  • FY26 disbursements reached INR 10,531 crores, exceeding the INR 10,500 crores guidance.

  • Q4 FY26 disbursements hit an all-time high of INR 3,245 crores.

  • AUM grew by 10.44% in FY26, with a target of 14% for FY27.

  • GNPA improved to 0.85% for FY26, and PCR increased from 49% to 56%.

  • Profit for FY26 (excluding one-time items) grew 20% YoY to INR 1,027 crores.

  • 85% of the loan book is now on quarterly reset, ensuring better spread management.

Concerns

  • AUM growth of 10.44% for FY26 was slightly below the initial target of 11-12% due to higher-than-expected rundowns.

  • The cost-to-income ratio is expected to be 'a little elevated' in FY27 due to IT implementation costs.

  • Competition from LIC Housing and Bajaj Finance continues to lead to prepayments, particularly for lower rates and top-up options.

Key financials

4 periods

Headline

  • Book Yield (post-reset)
    9.8%
  • Spread (post-reset)
    2.8%

Q4 FY26

  • Disbursements
    ₹3,245 Cr

FY26

  • Disbursements
    ₹10,531 Cr
  • AUM Growth
    10.4%
    YoY +10.4%
  • GNPA
    0.85%
  • PCR
    56%

FY26, ex-one-time

  • Profit
    ₹1,027 Cr
    YoY +19.8%

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.

Capital allocation

high confidence
  • Capex Capex disclosed
    • IT project capex ₹100 Cr
    So the net impact will be INR40 crores for the full year okay? And in terms of our the full year opex, it's about INR311 crores, of which INR177 crores is for the employee cost and the other cost is about INR134 crores. So the employee cost will probably go up by about 10%, 12% because we are also adding staff and there will be some encryption. And the other cost, which is INR134 crores, will probably go up to about INR175 crores to INR180 crores.

Guidance & targets

Disbursement

  • Disbursement Target Disbursement · FY27 · High confidence INR 13,000 crores
    So based on that, with a INR13,000 crores disbursement target that we have kept for the year, we should be having a net addition of about INR6,000 crores to the book in FY '27, which would result in about a 14% AUM growth.

    — Suresh Iyer

AUM Growth

  • AUM Growth AUM Growth · FY27 · High confidence 14%
    So based on that, with a INR13,000 crores disbursement target that we have kept for the year, we should be having a net addition of about INR6,000 crores to the book in FY '27, which would result in about a 14% AUM growth.

    — Suresh Iyer

Disbursement Growth

  • Karnataka Disbursement Growth Disbursement Growth · FY27 · High confidence 15%
    And in this year, we are targeting a 15% growth in disbursement in Karnataka.

    — Suresh Iyer

  • Overall Disbursement Growth Disbursement Growth · FY27 · Medium confidence 25%
    Growth next year, we are almost targeting an almost similar 25% growth across all the zones because that is what it is.

    — Suresh Iyer

Rundown/Prepayment

  • Rundown/Prepayment Rundown/Prepayment · FY27 · High confidence INR 7,000 crores

    Previously INR 6,600 crores → INR 7,000 crores

    For the current year, we are targeting that if this is a present position, then we may have a rundown of about INR7,000 crores for the entire year.

    — Suresh Iyer

Credit Costs

  • Credit Costs Credit Costs · FY27 · Medium confidence benign
    And therefore, in terms of our going forward guidance for delinquency, we expect that our credit costs will remain benign.

    — Suresh Iyer

Spread

  • Spread Spread · FY27 · High confidence 2.75%
    However, again on a conservative basis, we therefore continue the guidance of 2.75% spread and 3.75% on the NIM for the FY '27.

    — Suresh Iyer

NIM

  • NIM NIM · FY27 · High confidence 3.75%
    However, again on a conservative basis, we therefore continue the guidance of 2.75% spread and 3.75% on the NIM for the FY '27.

    — Suresh Iyer

ROA

  • ROA ROA · FY27 · High confidence 2.4%
    And so overall, next year, we hope to be able to maintain our ROA of 2.4%.

    — Suresh Iyer

ROE

  • ROE ROE · FY27 · High confidence 18% plus
    And therefore, ROE might slightly be impacted because of the cost, but still it will we hope to have an ROE of 18% plus.

    — Suresh Iyer

IT Costs

  • Additional IT Costs IT Costs · FY27 · High confidence INR 40 crores
    Going forward, we would have a little impact in the current financial year of about INR40 crores, which we have been talking about on our cost because of our IT implementation.

    — Suresh Iyer

Branch Expansion

  • New Branches Branch Expansion · H1 FY27 · High confidence 28
    And as I mentioned, 28 branches are also planned to be opened in the first half of this year.

    — Suresh Iyer

Sales Team

  • Sales Team Size Sales Team · FY27 · High confidence 150 people

    Previously 80-90 people → 150 people

    we are looking at increasing it from about 80, 90 to about 150 people.

    — Suresh Iyer

Employee Cost

  • Employee Cost Growth Employee Cost · FY27 · High confidence 10-12%
    So the employee cost will probably go up by about 10%, 12% because we are also adding staff and there will be some encryption.

    — Suresh Iyer

Other Opex

  • Other Opex Other Opex · FY27 · High confidence INR 175-180 crores

    Previously INR 134 crores → INR 175-180 crores

    And the other cost, which is INR134 crores, will probably go up to about INR175 crores to INR180 crores.

    — Suresh Iyer

Credit Cost

  • Credit Cost Credit Cost · FY27 · High confidence 15 basis points
    However, on a conservative basis, we would still like to continue with the guidance of 15 basis points, although we don't see any stress and it could well be below that by the end of FY '27.

    — Suresh Iyer

What to watch in Q1 FY27

FY27 Disbursement Target Achievement

FY27
Current INR 10,531 crores (FY26)
Target INR 13,000 crores (FY27)

Why it matters

Verifies the company's ability to accelerate growth and achieve its ambitious disbursement target.

So based on that, with a INR13,000 crores disbursement target that we have kept for the year, we should be having a net addition of about INR6,000 crores to the book in FY '27, which would result in about a 14% AUM growth.

Risks & concerns

  • Rate Upcycle Impact on Spreads

    medium

    A rate upcycle could impact spreads for the remaining 15% of customers not on quarterly reset, creating a lag in asset repricing.

    Analyst acknowledged

  • Competition from LIC Housing and Bajaj Finance

    medium

    LIC Housing offers lower rates, and Bajaj Finance offers aggressive top-up options, leading to prepayments for Can Fin Homes.

    Analyst acknowledged

  • Geopolitical Situation Impact on Delinquencies

    low

    Despite geopolitical situation, no major stress in delinquencies observed in March and April.

    Management downplayed

Q&A highlights

8 direct
Impact of IT Programs Direct
See, in terms of the IT, which we have already implemented, we have presented the share the slides. So we have already implemented on the infrastructure side, and also on the security aspect. So both have been completely done. And of course, that is helping us in terms of the speed in terms of the connectivity and all those issues, that has come down considerably wherever there were these MPLS lines that has happened, considerable reduction has been witnessed.

Analyst sought qualitative insights on IT benefits; management detailed improvements in speed, security, and application efficiency (deposits, HRMS, digital signatures, DMS).

Asked by Siddhant

BT Out Rate and Rundown Peak Direct
I would probably assume so because as I mentioned, if I look at the data today, our BT outs in Q4 have marginally increased and that is also probably a function of the increased portfolio. Otherwise, in terms of the percentage, it is almost static, which normally in Q4, see witness is a spike because of increased competition and everything, but it has almost INR380 crores has been just INR400 crores for us.

Analyst questioned if BT out rates have peaked after quarterly resets; management indicated stability and marginal increase, suggesting the peak might be reached.

Asked by Siddhant

Lag in Spreads during Rate Hike Cycle Direct
See, actually, today, almost 85% plus is on quarterly reset. And in terms of our liability side, about 62%, which is the bank-related loans is on a link to repo rate. So if there is a repo rate increase on the liability side, about 62% of the book will witnessed, the liability book will witness an increase immediately or in the coming months. Whereas on the asset side, since 85% is quarterly, that will be about maximum, maximum 1/3 I mean 1 quarter delay might be there.

Analyst inquired about spread sensitivity to rate hikes; management clarified asset-liability repricing dynamics, indicating a potential 1-quarter lag on the asset side.

Asked by Siddhant

Housing Loan Book Growth and LAP Focus Direct
See, actually, it was a conscious effort to have a increase in our non-housing -- and to some extent, it was also because we had to focus more on LAP, particularly in Karnataka, where in Q1, Q2 and almost Q3 also to some extent, we had an impact of our e-khata issues where for fresh sanctions, there were issues in getting the registration or the sales deeds and all. So there was a compulsory requirement also where in one of the most important markets for us, we had to focus more on LAP.

Analyst questioned the <5% housing loan growth; management explained a strategic shift to LAP due to e-khata issues in key markets like Karnataka.

Asked by Nipun Khemka

Disbursement and AUM Growth Targets for FY27 Direct
So this new branch strategy that we have done has really helped in the last financial year. And going forward also, this year, we are looking at 28 branches to be opened, which again, we would be opening in the first half of the year. So that also should bring in plus this 54 branches that we've opened, we'll also have some more efficiency improvements because not all of them have reached their breakeven points.

Analyst sought clarity on how ambitious FY27 growth targets would be met; management detailed branch expansion (54 opened, 28 planned) and sales team growth (80-90 to 150 people) as key drivers.

Asked by Pavan Kumar

Q4 Disbursement Momentum and Demand Outlook Direct
So first thing about the disbursement, yes, to some extent, that is a seasonality because normally across the year, we have seen that it is a 45%, 55% breakup, H1, H2. So roughly H1 is a little lower than H2 definitely. And as in Q3 and Q4, once the festive season starts, the demand picks up and the business also picks up. So that is mainly the seasonality part of it.

Analyst questioned if strong Q4 momentum was seasonal or structural; management attributed it primarily to seasonality but confirmed healthy demand in their target segment.

Asked by Abhijit Tibrewal

Impact of IT Sector Layoffs in Bangalore Direct
As regards IT impact, our IT impact has been very, very less, in fact I don't think our in fact, our delinquency ratio in Karnataka is the lowest among all our 6 zones. And we have not seen that impact. In fact, our absolute value of NPA in Karnataka in March '26 is lower than our absolute value of NPA in Karnataka in March '25.

Analyst probed potential impact of IT layoffs on asset quality in Bangalore; management stated no adverse impact, citing low delinquency in Karnataka and small exposure to IT salaried segment (6% of book).

Asked by Abhijit Tibrewal

Competition and Prepayments from LIC Housing & Bajaj Finance Direct
Absolutely right. LIC because they offer a lower rate. In fact, they were also offering 7.15% at a point in time for new business, and that is one thing. But in case of Bajaj, what happens is it's normally a takeover plus top up. And many times, we are not able to match the kind of top up that they are able to offer.

Analyst asked about losing prepayments to competitors; management acknowledged LIC's lower rates and Bajaj's aggressive top-up offers, while maintaining a conservative LTV approach.

Asked by Andrey Purushottam

2 min read 7 chapters

Detailed narrative

Strong Disbursement Performance and AUM Growth

Can Fin Homes reported robust disbursement figures for FY26, reaching INR 10,531 crores, marginally exceeding the guidance of INR 10,500 crores. Q4 FY26 marked an all-time high with INR 3,245 crores in disbursements. The company achieved an AUM growth of 10.44% for FY26. For FY27, management targets a 14% AUM growth, supported by a disbursement target of INR 13,000 crores.

Improved Asset Quality and Credit Cost Outlook

The company demonstrated an improvement in asset quality, with the GNPA ratio reducing to 0.85% for FY26, down from 0.87% in the previous year. The Provision Coverage Ratio (PCR) also saw an increase from 49% to 56%. Management expressed confidence that credit costs would remain benign in FY27, guiding for a conservative 15 basis points, potentially lower.

NIM and Spread Management Post Portfolio Reset

Can Fin Homes successfully converted over 85% of its loan book from annual to quarterly reset, a significant shift from 71.14% last year. This transition is expected to stabilize spreads, with a projected book yield of 9.8% and a spread of 2.8% plus for FY27. The company maintains its guidance for a 3.75% NIM and 2.75% spread for FY27, despite passing on benefits to customers.

Strategic Focus on LAP and Geographical Expansion

Due to initial challenges with e-khata issues in Karnataka and Telangana, the company consciously increased its focus on the Loan Against Property (LAP) segment, which grew by almost 2 percentage points in FY26. With the resolution of these issues, Karnataka saw a 7% disbursement growth. The company plans to open 28 new branches in H1 FY27, including 3 in Karnataka and 2 in Telangana, to drive growth in these regions.

IT Transformation and Operational Efficiency

Can Fin Homes has made significant progress in its IT transformation, completing infrastructure and security upgrades. New applications for deposits, HRMS, digital signatures, and document management systems (DMS) have been implemented, improving speed and efficiency. While an additional INR 40 crores in IT costs are expected in FY27, the overall IT project outlay is INR 300 crores (INR 100 crores capex, INR 200 crores opex over 5 years), with current FY26 IT costs at INR 20 crores.

Cost of Borrowings and Funding Strategy

The current borrowing cost stands at 6.99% as of April 1st. The company has prioritized bank borrowings, securing rates below 7%, and strategically managed its CP rates, which were raised at 6.45% in April compared to 7-7.35% in Q4 FY26. The blended outstanding NCD cost is around 7.66-7.67%, with opportunities to replace maturing NCDs at lower rates.

Profitability Targets and Cost Management

Excluding one-time events, the company's profit for FY26 was INR 1,027 crores, representing a 20% growth over FY25's INR 857 crores. For FY27, Can Fin Homes targets an ROA of 2.4% and an ROE exceeding 18%. Employee costs are projected to increase by 10-12%, and other opex is expected to rise to INR 175-180 crores from INR 134 crores, contributing to a slightly elevated cost-to-income ratio in FY27.

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