Canfin homes ltd


(JKS) #1190

http://www.bseindia.com/xml-data/corpfiling/AttachLive/a6a70aba-3a8c-4870-bbde-428245bc007d.pdf
Q3 results
Investor presentation
http://www.bseindia.com/xml-data/corpfiling/AttachLive/5441b14c-07e9-486f-a18c-e8ea6ec3cb6c.pdf

Market does not seem to like the results…as of now, stock is down quite a bit
Q3 highlights
 Fresh Sanctions in & Disbursements in Q3 up by 14% & 9% (Y-o-Y) resp.
 Loan Book grew by 19% Y-o-Y and by 4% over Q2.
 NII, OP & PAT for Q3 rose by 16%, 24% & 34% (Y-o-Y) respectively.
 Cost to Income Ratio improved to 14.54% from 17.15% at Dec’16 (14.61% at Sep’17)
 Gross NPA contained at 0.46% (0.40% in Q2) while Net NPAs stood at 0.25%.
 90.5% of fresh loan approvals during the year were for Housing & 9.5% for Non-Housing
 Average ticket size of incremental Housing & Non-Housing Loans are Rs.18 lakh and Rs.9
lakh respectively
 92% of fresh approvals under Housing Loans are to Individuals with income below Rs.18
lakh of which, 40% to individuals with annual income upto Rs.6 lakh (LIG)
 74% of the total loan book as at Dec’17 comes from Salaried & Professional segment.


(mp bajaj) #1191

Requesting Hitesh ji for analysis. Why market not liking this q on q growth after demonetisation, RERA, local Tamil nadu property registration problem etc. Management is consistent with their strategy. After demonetisation other HFCs are growing through LAP which Can fin Repco etc do LAP up to a limit only


(Kumar Saurabh) #1192

May be the slowness in new approvals continues which market does not like. Also, quality of lending is undergoing a bit of dilution with % non-housing loans and non-salaried loans increasing but I think that is the call management has taken for growth as core segment competition intensifies

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(Varun) #1193

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How much premium of HDFC vs Canara Bank as promoters is justified?
All data taken from presentations of the respective companies and is for YTD (9 months).
CAGR as per screener.

Price for PE Calculation - Canfin = Rs 485.6, GRUH = Rs 592.20
Disc: Invested from Lower Levels


#1194

RoA for GRUH would be higher for full year comparison as Q4 profits will generally be much much higher than other quarters


(Varun) #1195

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I agree that GRUH improves in Q4 but canfin is catching fast. Its growing faster then GRUH and growth is consistent PAT-wise & Income-wise.

I believe HDFC/GRUH demands premium for parentage but about 40 PE? I think this gap will reduce going forward.


(atul1082) #1196

But if u see the IPO price of capital first , till date, it has not given any return.


(Varun) #1197

this is about canfin homes… Capital first is another story… it was bleeding when it was a part of future group. After the new management took over it gave 7x returns.


(atul1082) #1198

Ok. thanks.I was not aware of mgt change and the returns.


#1199

What’s everyone’s opinion about Q3 numbers of Canfin?


(Sarabjeet Singh) #1200

Many things have already been covered, just wanted to share my 2 cents:

  1. If we see new approvals and disbursements, these have picked up well in Nov and Dec. Percentage increase is really good if you compare all previous months in FY 18

  1. This time management has lowered their FY18 guidance for loan book from 17,000 to 16,000 crore. However this too means they aim to disburse about 2,000 crore ( considering Q3 with disbursements of 1322 the loan book grew by only about 600 crore) in Q4 which is very aggressive target considering recent past however if they achieve then it can somewhat cover up for the slow growth ( stock price and loan book) it showed last few months

Disc : Invested


(Sagar Bhadury) #1201

I am not sure why markets reacted in negative after such a good result. Anyways if there is further drop, Perhaps its good for long term investors to grab more. More than the disbursement growth , i was more concerned with the LAP % and NPAs , i think none of them are out of range , when compared to the peers. 74% of the total loan book as at Dec’17 comes from Salaried & Professional segment is a huge thing which gives me more comfort on the asset quality side and perhaps the valuation. Increasing loan book is perceived to be fairly easy than maintaining good asset quality for which the market pays a premium. Overall I am satisfied with the results.

Disclosure : Invested


#1202

It would have been nice if the NPA numbers started trending downwards. It is still the best in class at 0.46% but has been inching up since Q1


(Sarabjeet Singh) #1203

Mgt interview on CNBC


(Susindar) #1204

Most metrics look attractive now including price. Return on Equity is creeping up to 25% this year which defines winners from also rans. However, growth is a major concern. PBT has flatlined over the last 4 quarters and has shown zero growth. I hope this is due to weakness in southern markets due to RERA and demonetization. Tamilnadu is especially weak now. Hopefully growth improves fast or the stock will be quoting at 12-15 PE which is at least 30% lower.


#1205

Perhaps one of the reasons for slower offtake in loans for Canfin - as Bangalore is a major market…

http://bangaloremirror.indiatimes.com/bangalore/others/bangalore/others/rera-puts-685-projects-in-the-red/articleshow/62434089.cms


(Venkata Kolli) #1207

http://www.bseindia.com/xml-data/corpfiling/AttachLive/641df015-186d-4d06-8ef0-157574b6f3b7.pdf

It seems canfin & Canara bank management had met potential 30% stake buyers for 2 full days. all of them are highly reputed investors or companies, it would be interesting event to watch out.


#1208

Is it for stake sale purposes? Certainly looks so as HDFC, Kotak bank, RBL banks were there. Can anyone confirm?


(Mahesh C) #1209

I would be glad if they can sell their entire stake to Kotak, hopefully Kotak keeps it as is, as a independent listed company and builds on. I have been feeling, the current management though disciplined and ceonservative, are struggling to compete.


#1210

They may meet many more people over a long period before anything becomes final. It’s good news if Canara Bank still wants to sell its entire stake in Canfin.