ValuePickr Forum

Canfin homes ltd

  1. Interest subsidy would be given to all FIs (including NBFCs) registered with NHB
  2. Interest subsidy would be paid by NHB to HFCs in one shot and that would be adjusted again Principal outstanding.

Disc: I work in NBFC HFC


Thanks umang for clarifying.

That would be a good trigger for loan growth for HFCs in smaller ticket sizes. Also since effective interest will be equivalent to savings account interest for the customers along with small EMI size, I tend to believe that NPAs would be negligible in this category.

Interestingly, Can Fin is up 5% today again great way to start 2017 also.

Going through the entire thread…it’s interesting to see how this long term story has been unwinding and to me personally it looks like the run way is pretty large and to be kept unwinding for years to go!

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Great work, Yogesh. Thanks for sharing your detailed analysis. BTW, I’ve also read your similar analysis on Banks, but yet to read on MFI’s. Kudos :smiley:

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Dear boarders - Can anyone throw some light on the impact Canfin might have due to sudden drop of lending rates by banks? I know Canfin’s funding from banks is less. But the NCD / CP funds - can they be re-priced quickly, so they can reduce their home loan rates to customers? I generally see the commercial paper duration to be shorter.

An eg., below.

Jan 3 (Reuters)- Below are the details of India commercial papers dealt in the
primary market. (10 million = 1 crore)



CANFIN HOMES MF 06-Mar-17 ICRA A1+ 6.5500 1000 04-Jan-17
CANFIN HOMES BANKS 06-Mar-17 ICRA A1+ 6.5500 5000 04-Jan-17

MFI comparison is here,


Hi @Yogesh_s,

Thanks a lot for this informative comparison. I particularly liked your style of presenting data through charts, makes it so easy to comprehend.

Is this in excel or are you using some other charting tool?

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This is Excel and version is so old that I don’t event want to mention it. :slight_smile:

If a picture is worth thousand words then a chart is worth a thousand numbers. Makes number crunching easy.

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I never mind it. Old is Gold and many a times only Old is Gold. :smile:

Absolutely agree. It’s quite handy in striking it big when market gives you opportunity if one is “few bets, infrequent bets, big bets” kind of super concentrated investor aka CM and I find tremendous virtue in this. Just do the comparative industry analysis that lies in one’s CoC with long term predictable economics, i.e. Finance and many of its offshoots, keep the analysis ready preferably in pictorial forms and wait patiently for the right opportunity and strike it big when one gets it and market seems to offer such opportunity once in while every 1-2 years.

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Thanks for the link, Yogesh. This one is similarly impressive…

Sobha developers (one of the leading, slightly high end real estate developer in Bangalore and Kerala) has reported de-growth in new home sales for Q3 2017. Details below. In Bangalore alone there is 25% de-growth vs Q2. I am not sure about seasonal factor but it was festival time, so sales should only be higher. Also, customers of properties from this developer don’t really belong to the target customer segment of Canfin Homes. And one developer is not a benchmark for the whole real estate market of Bangalore. Still worth to see the impact of demonetization on real estate transactions.
I am quoting Bangalore here, as that city alone comprises 38% of the loan book of Can fin (as mentioned by the CEO in a TV show or some).
Also interesting to know that Godrej properties had recorded very good apartment sales in this period is Pune. That must definitely be in the high end segment. We will know more once Gruh announces results this Friday and Canfin next Tuesday.

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I think instead of just a QoQ numbers, info on active projects and new launches during the quartet might be more helpful to see why revenues were down. I thought Sobha wouldnt cater to people who bought using blackmoney (the black money paid in cach and goes unaccounted). I agree with the fact that there are some challenges for the real estate companies, especially the ones that are small and deal with unaccounted cash. I am keeping my fingers crossed to see how would have housing finance companies done this quarter.

In their report to the exchanges, the builder has mentioned that this is a
short term phenomenon due to demonetization. Also, the YoY numbers also
indicate a 20% de growth. That is why it is interesting.
Another interesting thing to note is: in the dec quarter, the promoter
stake of canfin homes has gone by 0.6% It is not Canara bank that has
increased the stake but their JV - Canara Robeco MF has bought that share
from market. The fall based on selling by catamaran has been bought into.


Textbook style execution.

NIM has risen every quarter since last 10 quarters.


CAN FIN HOMES - The PSU which has Quadrupled in wealth for investors in a short span of time is a wealth creator without doubt . I have been tracking Can fin homes for the past 6 months , nd its track record has been excellent . Its posted numbers in terms of Asset quality and Loan book growth has been impressive .

The execution of the Managment seems to be excellent , Major target customers are salaried people that’s nearly 88% and remaining Profesionals is directly linked to the Asset quality and lower delinquency rate . Loan portfolio too is majorly concentrated on Housing loans and a lower proportion on Non housing loans .

NIM around 3.2 % is excellent with 1.65 ROAA and a ROE of 18% the banks p/BV is around 5 which made me skeptical about the valuation . With a 18% ROE I would be willing to pay near 3.5 times Book whereas the stock quoting at 5 times Book is a little over valued . The NPA are lowest under 0.18 whereas the industry average is 0.70 and a full provisioning looks strong in terms of mitigating risks .

I have written a research report on Can Fin homes , the link is provided above .

Disclaimer : I’m not a registered analyst . Not holding . Following closely , views may be biased . The report has been presented to clients and some of whom may have bought with/without my knowledge .


well you can’t blame valuations now, there were enough options to accumulate it during past 2 months, esp after the management clarification post catamaran plunge… The world lacks growth and where ever investors see consistent growth it would be bought into… you may look at PNB housing as valuations are still reasonable there or maybe Repco post the recent fall


Very impressive set of numbers. Disbursals slowed quarter on quarter, may be one off, but grew YoY.
The margins continue to improve. Very pleased. With interest rebate for low income houses announced from Gov, they are trying to capitalize it with opening centers to approach this particular segment. Would be interesting how it pans out.

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Exactly should have bought a piece of the business when it was not in the fancy of investors . PNB too I have studied its impressive too . On a Peer comparison basis than Odds are higher for PNB at current levels … At the same P/e of 28 it’s a cheaper with Lower p/b, Post IPO its at 2.6 somewhere so that’s looking cheaper .

ROAA is what I’m looking for as PNB is a little diversified and in its loanbook than Can fin and geographically diversified to 3 regions whereas Can fin is more of business in South India . Managment both being PSU have to wait and see how their Asset quality is going forward .

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Canfin Homes Concall update:

  • Dont see much impact of demonetisation—there was some slack in Nov–but growth is back to pre-demonetisation levels
  • Avg business/branch is ~100crs
  • Canfin is known for its asset quality
  • Maintain our priority for salaried class—which accounts for 77% of the total loan book
  • Avg loan to Value is 70% in housing segment, LTV in LAP book is below 50%
  • Interest subvention announced by government is positive and augurs well for growth
  • Prepayment rate in housing is 16-17% including advance payments
  • Canfin follows risk based category pricing—
  • Avg yield in housing segment is 10.7%, and in non housing ~14%
  • Disbursements improved inspite no rates slashed by company in Dec–rates are reduced by 75bps effective today
  • Rural hosuing is 12% of loan book—this is a fixed pricing book
  • Lot of opportunity present in affordable housing—10 sattelite centres to be converted into full fledge affordable housing centres
  • Expects to maintain and work on improving cost/income ratio