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Can Fin Homes shares dip despite Q2 profit rise and analyst optimism

EditorAmbhini Aishwarya
Published 10/18/2023, 01:37 AM
© Reuters.

Shares of Can Fin Homes, a Canara Bank-backed housing finance firm, experienced a decline in the post-market trading hours on Wednesday, following the announcement of its Q2 results. The company's shares traded at ₹757.25 on the National Stock Exchange, marking a 1.43% drop from the previous close.

The quarterly report revealed an 11.5% year-over-year (YoY) increase in net profit, reaching ₹158 crore. This exceeded estimates by 7%, attributed to a higher net interest margin and a lower effective tax rate. The company's outstanding loan book expanded by 16% YoY to ₹33,359 crore (INR100 crore = approx. USD12 million) with a client base of 2.53 lakh, with salaried professionals making up 72% of the clientele.

However, the report also highlighted an increase in gross non-performing assets (GNPAs) and net NPA, which rose to 0.76% and 0.43%, respectively, fueling concerns over bad loans.

Despite these mixed results, several prominent financial institutions have maintained their positive outlook on Can Fin Homes. Morgan Stanley issued an "Overweight" call on the company's stock, while Prabhudas Lilladher recommended a "Buy" rating with a target price of ₹900. Another undisclosed source has set a target price of ₹1,000 per share for the company.

The company is scheduled to conduct an earnings call later today to provide further insights into its performance and strategies.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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