Canfin homes ltd

[pakiya]

@Vedant

Some more inputs from the presentation.

My calculation of NIM was 2.86%, the PPT mentions 2.9% for FY13. The same has increased to in June 2013 as per the PPT. This is great news. My projections were based on 2.8% NIM and 67% growth in operating expenses for FY14. Actual operating expenses in June quarter is 1/4th of FY13, so even that projection could be a conservative one.

Gross NPA is still very low at 0.4% which is the best in home loan industry. Loan book has increased by 10% in just one quarter. Normally April is very dull quarter for home finance companies, but Canfin has done better than March 2013 which in itself is a good indication of the growth momentum.

In one of the reports referred above (which I had read) the company has categorically conveyed that their cost of funds won’t get affected in FY14 as they have already raised the required fund from NHB and Canara Bank at competitive rates.

As Hitesh mentioned this looks like a no-brainer at 130 levels.

Cheers

Vinod

3.14%

[pakiya]

@pakiya

Some more inputs from the presentation.

My calculation of NIM was 2.86%, the PPT mentions 2.9% for FY13. The same has increased to in June 2013 as per the PPT. This is great news. My projections were based on 2.8% NIM and 67% growth in operating expenses for FY14. Actual operating expenses in June quarter is 1/4th of FY13, so even that projection could be a conservative one.

Gross NPA is still very low at 0.4% which is the best in home loan industry. Loan book has increased by 10% in just one quarter. Normally April is very dull quarter for home finance companies, but Canfin has done better than March 2013 which in itself is a good indication of the growth momentum.

In one of the reports referred above (which I had read) the company has categorically conveyed that their cost of funds won’t get affected in FY14 as they have already raised the required fund from NHB and Canara Bank at competitive rates.

As Hitesh mentioned this looks like a no-brainer at 130 levels.

3.14%

Cheers

Vinod

[vishal]

4 new branch coming soon

[hemantbhatia]

Research report by HDFC Sec:

http://www.hdfcsec.com/Share-Market-Research/Research-Details/StockReports/2996465

[amith]

@Vedant

In one of the reports referred above (which I had read) the company has categorically conveyed that their cost of funds won’t get affected in FY14 as they have already raised the required fund from NHB and Canara Bank at competitive rates.

**Does that mean that the loans from NHB and Canara Bank at fixed rates? So even if there is a rate hike, their current loan book will not see any impact, only the newer loans will.

Also, I believe all the loans to their customers are at floating rates.
**

[amith]

@Vivek_6954

Is Canara Bank making hay at the cost of their hapless subsidiary Canfin Homes lending it at 10.25 or 10.5% base rate n Canfin Inturn doing lazy banking n lending to safe salaried customers @ 10.75%.?

**very relevant point by Vivek Gautam, which I had missed.

After going through their latest AR, realized that >10.5% interest was paid to Canara bank on average yearly balance. while yield on this loan is about 10.75% only (since **share of non-housing loans is <1%).
**
however, I checked REPCO’s AR, it seems that interest rate of about 10.5% on loans taken from banks is common.

CanFin, having AA+ ICRA rating, can it not raise money using other avenues like commercial paper or debentures like GRUH?

**

[amith]

additional observations regarding borrowings fromcanara bank:

in 2011-12 : 1544 cr.

in 2012-13: 1568 cr.

So almost no additional loans were taken from canara bank in 2012-13. This is good news. The new management seems to have realized it doesn’t make sense to borrow from canara bank @10.5 and lend @10.75.

[vishal]

can anyone please tell me at what interest NBHF company borrow money from NHB, i am not able to find the data

[AnkGupta]

What is the reason for marketing ignoring Canfin homes excellent results as the stock continues to remain weak??

[ankitgupta]

I think its primarily the current pressure on stocks in Banking/NBFC sector along with the PSU tag which the company has.

[govindarajanv]

It is good that it is trading at such a low valuation. I feel it is better to make use of this opportunity to load up this stock for my personal portfolio. The money we pay now will be paid off in dividends alone. My thought is, market does not have any great expectation from this stock. In worst case, it would grow at 8 to 10% and can pay you off in dividends. if there is any growth or PE re-rating, then it is a bonus.

[ashish620]

Hi Vivek,

Catamaran also invested in SKS Microfinance @ 950 per share, before its IPO and had a lock in period of 2 years POST-IPO, so that info is to be discounted.

thnx

[Vivek_6954]

Seems the market cannot ignore earnings n excellent dividend for long . Canfin homes has made an up side move of nearly 20% from its recent lows.

[Vivek_6954]

Not much activity on this thread for some time.

Sobha developers the Bangalore HQed co has come out with excellent results. Same is expected to be the case with other Blore based RE cos. this shud augurs well for Canfin as it too is Blore HQed co n 65% of sales is from Southern region.

Can any of our Blore/ South based friend tell more abt the performance of the co. Is Canfin the 2nd largest HFC in Blore/ Ktk region? Any scuttlebutt on this will be highly welcome.

Co has appreciated from its recent lows of 115 n has given excellent dividend of Rs 4.

Hsg loan penetration is still abysmally low in India so pie is big enough for all quality HFCs.

Is the PSU tag the only factor hampering in rerating of otherwise well performing co?

Views Invited.

[Vivek_6954]

http://www.bseindia.com/xml-data/corpfiling/AttachLive/Can_Fin_Homes_Ltd_161013.pdf

Some very pertinent questions raised by our very own VPer Nag Brahma ji & eually sensibly answered by Canfin Mnanagment. Company is in safe hands & on growth path IMHO.

[Vivek_6954]

Co seems attractively priced at 4 PE ,3 % div yield,BV of 190 for march 13 & expected 220 for March 14.increase of NIM to 3.1% & CAR to 15.2%,tripling of borrowing from low cost NHB . expansion of offices to 77 most of newly opened one have turned profitable,concentration in bangalore & chennai regions,good growth in topline & bottomline,MD tenure now to be of atleast 3 years as per AGM minutes,present one responsible for turnaround continuing for 1 more year IMHO

Views invited.

[raj1968]

@Vivek_6954

Co seems attractively priced at 4 PE ,3 % div of 190 for march 13 & expected 220 for March 14.increase of NIM to 3.1% & CAR to 15.2%,tripling of borrowing from low cost NHB . expansion of offices to 77 most of newly opened one have turned profitable,concentration in bangalore & chennai regions,good growth in topline & bottomline,MD tenure now to be of atleast 3 years as per AGM minutes,present one responsible for turnaround continuing for 1 more year IMHO

Views invited.

yield,BV

Hi Vivek,

This is one of the many companies in housing finance businesse without any niche. It has to compete with so many banks, HDFC twins and so on. I doubt if it can provide consistent earning growth. It may get re-rated(if at all it happens) and then story will be over. Just for example GIC HF is struggling since years. For me it’s an avoid. I would rather look for Gruh, Repco or HDFC who can provide a long term compounding with greater certainty.

Turnarounds in majority of cases take much longer than expected.

[vishal]

This type of information is really very useful for small shareholders , i am getting more confident on company performance in coming years .

slowly accumulating more

[vishal]

Two new names in more than 1%

1. Vayudoot commercial - 1.55
2. Golden Financial service - 1.34

already so many times SEBI has imposed penalty on vayudoot commercial for price manipulation

http://www.watchoutinvestors.com/history.asp?def_code=C0084690

[manish962]

Q2 results out. Income 137.95 v/s 92.72 NP 18.75 v/s 14.44 yoy.

EPS 9.1

http://www.bseindia.com/xml-data/corpfiling/AttachLive/Can_Fin_Homes_Ltd_291013_Rst.pdf