Motilal Oswal Maintains Neutral Rating on Can Fin Homes, Sets Target Price at Rs 1000

Motilal Oswal Reiterates Neutral Rating for Can Fin Homes

Can Fin Homes, a prominent player in the Indian housing finance sector, has reported a notable growth in its fourth-quarter (4Q) profit after tax (PAT) for the financial year 2026. According to Motilal Oswal's research report, Can Fin Homes' 4Q PAT grew approximately 48% year-over-year (YoY) to ₹3.5 billion, surpassing estimates by 17%.

The company's net interest income (NII) in 4QFY26 witnessed a 21% YoY growth to ₹4.2 billion, aligning with expectations. Fee and other income stood at ₹187 million, a marginal increase from ₹168 million in the previous year. Operating expenses (Opex) rose 24% YoY to ₹875 million, in line with estimates. The cost-to-income ratio for the quarter stood at approximately 19.8%, slightly higher than the previous quarter's 18.5% but lower than the previous year's 19.4%.

Profit per Provisions (PPoP) for the quarter grew 20% YoY to ₹3.5 billion, meeting expectations. The company's PPoP for the entire financial year 2026 grew approximately 17% YoY to ₹13.4 billion.

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Key Metrics Comparison

The research report maintains a cautious outlook for Can Fin Homes, with the stock trading at 1.8 times its estimated price-to-book value (P/B) for the financial year 2027. Motilal Oswal models an advances-to-PAT compound annual growth rate (CAGR) of approximately 14%/7% over the financial years 2026-2028, with a return on assets (RoA) and return on equity (RoE) of 2.3%/17% in 2028. As a result, the research firm reiterates its Neutral rating for Can Fin Homes with a target price of ₹1,000, based on 1.7 times its estimated P/BV for 2028.