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Futurecaps Recommends – Can Fin Homes

Can Fin Homes is an established NBFC in the housing finance sector. It focuses on funding low & middle-income individuals and first-time homebuyers, preferably salaried professionals, while also extending services to builders, corporates, and others.

Its product portfolio includes: individual housing loans, affordable housing loans, credit-linked subsidy schemes, and Pradhan Mantri Awas Yojana (PMAY). It also provides loans beyond housing, such as commercial property loans, mortgage financing, rent receivable loans, and top-ups.

For individuals, Can Fin also offers personal loans, children’s education loans, loans for pensioners, as well as fixed and cumulative deposits.

The company operates in three key segments: Housing Finance, Non-housing Finance, and Deposits. The average loan ticket size is 18 lakh for housing and 9 lakh for non-housing credit. It also mobilizes both fixed and cumulative deposits as per NHB norms.

Headquartered in Bengaluru, Can Fin has a strong nationwide footprint covering 21 states with 205 branches and multiple specialized housing centers. Shri Suresh S Iyer is the current Managing Director & CEO.

Core Offerings

• Housing Finance
• Non-Housing Finance
• Deposits

Why It Stands Out

• 205 branches across 21 states and UTs, serving diverse geographies.
• Plans to expand network and penetrate new high-potential markets.
• Earnings CAGR of ~17.1% over the last 5 years.
• Intrinsic value estimated above 30%.
• Average borrowing cost free multibagger at 6.5%, sustaining healthy spreads.
• Loan book crossed ?30,000 crore – strong business growth.
• 27% loan share from self-employed customers (?8,477 crore).
• Attractive valuation: P/E ~15X vs peer average ~24X.
• Better value than Indian diversified financial industry average (28.9X).
• Revenue forecasted at 14.7% growth vs Indian market 9.6%.
• Earnings growth forecast ~13.6%, higher than savings rate.

Challenges

• Intense competition from banks and larger HFCs in Tier I & II cities.
• Credit risk due to borrower defaults.
• Macroeconomic factors like inflation, demand-supply, and interest rates can cause liquidity and funding risks.

Futurecaps Valuation Metrics

• Economic Moat – Moderate
• Growth – Good
• Valuation – Good
• Debt – High
• Integrity – Moderate

Summary

The company has the potential to deliver multibagger returns in the order of 300–500% over the next 5–10 years. Check our detailed research note for complete reasoning.

Who We Are

Futurecaps is a SEBI-registered Research Analyst (INH200006956) serving Indian investors since 2012. We follow Warren Buffett’s value investing principles and have created 50+ multibaggers in the past. Our pricing is investor-friendly, helping new investors benefit.