Motilal Oswal has assigned a Neutral rating to Can Fin Homes with a target price of ₹940 in its research report dated July 20, 2026. According to the report, the target price is premised on 1.6x FY28E P/BV valuation multiple. This target price aligns with recent analyst recommendations, as Prabhudas Lilladher has also set a target of ₹1,075 for the stock.
The company's Profit After Tax (PAT) for Q1FY27 grew approximately 20% year-on-year to ₹2.7 billion, which was in line with expectations. As reported by Motilal Oswal, Net Interest Income (NII) grew 18% YoY to ₹4.3 billion, also meeting analyst projections. The cost-to-income ratio stood at 19.5%, compared to 19.8% in the previous quarter and 18.3% in the previous year. Pre-Provision Operating Profit (PPoP) grew 16% YoY to ₹3.5 billion, in line with expectations.
According to the report, credit costs stood at ₹131 million compared to Motilal Oswal's estimate of ₹220 million, resulting in annualized credit costs of approximately 12 basis points. This represents a significant improvement from the previous quarter's 1 basis point and previous year's 27 basis points. The effective tax rate stood at 21% compared to 19.4% in the previous year.
As reported by Motilal Oswal, management indicated that demand remains healthy across geographies with no visible slowdown in any mortgage segments. Despite higher-than-expected portfolio attrition driven by higher partial prepayments and principal amortization weighing on loan book growth, the company reiterated its FY27 AUM growth guidance of approximately 14%. The company added that it retains flexibility to accelerate disbursements during the year to offset elevated run-offs and achieve targeted loan growth.
According to Motilal Oswal's analysis, the company is estimated to achieve an advances/PAT CAGR of approximately 14%/7% over FY26-28, with Return on Assets (RoA) and Return on Equity (RoE) of approximately 2.3% and 17% respectively in FY28. The research firm has reiterated its Neutral rating based on these projected financial metrics and growth trajectory.
