Can Fin Homes - Fixing For Governance; Building For Durability: HDFC Securities

HDFC Securities Institutional Equities

Can Fin Homes Ltd. has embarked on a journey to strengthen its governance framework and add new pillars to drive its next leg of sustainable and profitable growth.

Can Fin Homes has historically been one of the most durable franchises delivering healthy growth (25% assets under management compound annual growth rate during FY11-FY23) and steady earnings (25% earnings CAGR during the same period).

We believe that the recent incidence of fraud at one of the branches was an outlier event with the necessary corrective actions in place to mitigate the operational risk.

Can Fin Homes’ recent investments to widen its sourcing channels are likely to augment its customer funnel, thereby adding more legs to balance sheet growth.

We reiterate our 'Buy' rating on Can Fin Homes with RI-based target price of Rs 908 (implying 2.2 times Sep-25 adjusted book value per share) and our top pick among housing finance companies.

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