Prabhudas Lilladher Retain ‘BUY' On Midcap NBFC Stock, Sees 32% Potential Upside, TP Rs 700

Prabhudas Lilladher retains "Buy" on Can Fin Homes Ltd. (Canfin) with an unchanged target price of Rs 700 apiece. The stock with the given target price can give up to 32% returns if purchased at the current market price. Canfin is a midcap Financial sector stock operating as a Non-Banking Financial Company (NBFC) in the Housing finance industry.

Canfin's Stock Current Market Price, 52 Week High/Low, Returns

The share of Canfin last traded at Rs 531.70 apiece, up by 0.28% from its previous close. The stock traded its 52 week low on 20 June 2022 at Rs 406.65 apiece and 52 week high on 7 April 2022 at Rs 685 apiece, respectively.

In 1 week, the stock gained 0.62% and fell 8.06% in 1 month. It has fallen 11.41% in the last 1 year. In the last 3 years, it gained 58.39% and in 5 years it gained 1.99%, It has a market capitalisation of Rs 7,079.80 Crore.

New MD & CEO appointed

According to Prabhudas Lilladher, Can Fin Homes (Canfin) has appointed Mr. Suresh Iyer as MD & CEO w.e.f. 18th March, 2023, for a fixed period of 3 years, further extendable for two years. He has 25 years' experience of working in Gruh Finance across various functions like sales, operations, IT strategy, policy & pricing, risk, recovery, legal etc. MD&CEO appointment is positive as 1) it removes overhang of a key management position lying vacant and 2) increase business focus to aid loan growth. Further credit momentum has been steady with 20% YoY growth. MD & CEO's commentary on medium term strategy is a key.

Buy For a Target Price of Rs 700/share

"With increased focus, we expect pace of business to enhance without diluting profitability or asset quality and hence our FY23-25E loan CAGR estimate of 17% may see an upgrade. Our FY23/24/25E PAT remains unchanged and Canfin structural story is intact with likely RoE of ~17.0% over FY23-25E, while valuation at 1.5x is attractive. Rolling forward to FY25ABV, we tweak multiple from 2.1x to 2.0x and keep TP unchanged at Rs700. Retain 'BUY'," brokerage has said.

Disclaimer - The stock has been picked from the brokerage report of Prabhudas Lilladher. Greynium Information Technologies, the Author, and the respective Brokerage house are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to consult with certified experts before making any investment decision.