Take away from Canfin homes (CFHL) Conference call today. Mr. Sarda Kumar Hota, MD and Mr. Atanu Bagchi, CFO CFHL participated.
Due to demonetization and Govt efforts to curb on black money, the real value of real estate will be discovered and chances are that prices may fall. CFHL hopes to benefit from this scenario as housing will become more affordable. Majority CFHL loan customers are first timer house buyers. Plus CFHL gives loan against the registered value of the property and not the AGREEMENT value.
Home buying(especially for first timers) will be easier as the property prices are expected to be more accessible.
Canfin homes is growing at a controlled pace. The key geography remains South India with cautious forays in Western and North India.
Expects some delays in loan repayments. 78% of loan book are housing.12% loans are non-housing. Sites (plot) purchase is categorized under non-housing.
Total LAP is mere 6% (50% salaried and 50% non-salaried). LAP average ticket size is 10 lacs. Canfin Homes not keen in LAP as there is no cash flow based repayment.
More money is coming into the system which will be good for Canfin Homes as the 'cost of funds' to lower further. Canfin hopes to pass over the lower fund cost benefits to the home buyer. Affordable housing and affordable interest rates is a sweet spot for Canfin Homes. CFHL expects a strong loan demand as more clarity comes through.
Builder loans will see some impact in short term. Though it constitutes just 0.19 % (23 crores) of CH loan book.
CFHL sticks to its guidance of a loan book of 13,500 Crore by March’17. CFHL plans to grow at 28-29% for next few quarters and hope a 30% growth rate thereafter.
CFHL does not expect a need for a fund raise in any near future.
No confirmation on Canara bank offloading its stake in CFHL.
Concerns that affordable housing (around 15-18 lacs) is not readily available. Hopeful that govt will encourage low-mid cost housing development.