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CanFin Homes – Q1FY27

• Net Interest Income, came in line with estimates, growing 17.9% y-o-y and 1.2% q-o-q to Rs. 428 crore. Net Interest Margin expanded by 24 bps y-o-y to 3.98% (as a % of AUM), primarily driven by lower funding costs.
• Pre-Provision Operating Profit grew 15.7% y-o-y, anchored by robust NII growth. However, this was partially offset by a 25.0% y-o-y increase in operating expenses (Opex) to Rs. 85 crore and lower other income. On a positive note, Opex saw a sequential reduction of 2.5% q-o-q.
• PAT slightly exceeded estimates, rising 19.6% y-o-y to Rs. 268 crore. The bottom-line performance was supported by steady PPOP growth and benign credit costs.
• Asset quality remained stable and healthy. Gross NPA (GNPA) improved by 11 bps y-o-y to 0.87%, while Net NPA (NNPA) declined by 12 bps y-o-y to 0.42%.
• Credit costs (as a % of AUM) dropped significantly to 0.12% from 0.27% in Q1FY26. This came in below consensus estimates, serving as a key driver for the quarter's profitability.
• Assets Under Management (AUM) expanded by 10.8% y-o-y and 1.8% q-o-q to Rs. 42,961 crore. Disbursements registered strong growth of 29.5% y-o-y, though they experienced a seasonal sequential decline of 19.6% QoQ.
• Our View: The company delivered a healthy quarter characterized by steady AUM growth, resilient profitability, and stable asset quality. Operational efficiencies are visible with the sequential drop in opex, and the credit cost trajectory remains highly comforting. We maintain our 'BUY' rating on the stock.  

Results Table

Actual Vs. Estimates