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    Can Fin Homes

    CANFINHOME
    Financial Services·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

    6

    • 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

    3

    • 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

    Metrics

    8

    Periods

    4

    Headline

    2
    • Book Yield (post-reset)
      9.8%
    • Spread (post-reset)
      2.8%

    Q4 FY26

    1
    • Disbursements
      ₹3,245 Cr

    FY26

    4
    • Disbursements
      ₹10,531 Cr
    • AUM Growth
      10.4%
      YoY+10.4%
    • GNPA
      85%
    • PCR
      56%

    FY26, ex-one-time

    1
    • Profit
      ₹1,027 Cr
      YoY+19.8%

    Capital allocation

    1
    high confidence
    CategoryHeadline
    Capex

    Capex disclosed

    Guidance & targets

    16
    CategoryTargetPriority
    Disbursement
    Disbursement Target
    INR 13,000 crores
    		High
    AUM Growth
    AUM Growth
    14%
    		High
    Disbursement Growth
    Karnataka Disbursement Growth
    15%
    		High
    Disbursement Growth
    Overall Disbursement Growth
    25%
    		Medium
    Rundown/Prepayment
    Rundown/Prepayment
    INR 7,000 crores
    		High
    Credit Costs
    Credit Costs
    benign
    		Medium
    Spread
    Spread
    2.75%
    		High
    NIM
    NIM
    3.75%
    		High
    ROA
    ROA
    2.4%
    		High
    ROE
    ROE
    18% plus
    		High
    IT Costs
    Additional IT Costs
    INR 40 crores
    		High
    Branch Expansion
    New Branches
    28
    		High
    Sales Team
    Sales Team Size
    150 people
    		High
    Employee Cost
    Employee Cost Growth
    10-12%
    		High
    Other Opex
    Other Opex
    INR 175-180 crores
    		High
    Credit Cost
    Credit Cost
    15 basis points
    		High

    FY27 Disbursement Target Achievement

    FY27
    CurrentINR 10,531 crores (FY26)
    TargetINR 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.

    How to verify

    guidance_and_targets[metric='Disbursement Target']

    Risks & concerns

    3
    RiskSeverity

    Geopolitical Situation Impact on Delinquencies

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

    low

    Rate Upcycle Impact on Spreads

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

    medium

    Competition from LIC Housing and Bajaj Finance

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

    medium

    Q&A highlights

    8

    “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

    2 min read7 chapters

    Detailed Narrative

    01

    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.

    02

    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.

    03

    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.

    04

    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.

    05

    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.

    06

    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.

    07

    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.

    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.