Can Fin Homes Ltd reported financial results for the quarter ended June 30, 2015, with net sales of Rs. 2425.30 million, a 37.8% increase year-over-year, and net profit of Rs. 321.01 million, a 69.33% increase. The company provides loans for housing and non-housing purposes through a network of over 100 branches across India, and financial projections estimate continued revenue and profit growth over the next few years.

1. CMP 798.95
Target Price 910.00
ISIN: INE477A01012
JULY 28th
, 2015
CAN FIN HOMES LIMITED
Result Update (PARENT BASIS): Q1 FY16
BUYBUYBUYBUY
Index Details
Stock Data
Sector Housing Finance
BSE Code 511196
Face Value 10.00
52wk. High / Low (Rs.) 862.00/332.86
Volume (2wk. Avg. Q.) 20000
Market Cap (Rs. in mn.) 21268.05
Annual Estimated Results (A*: Actual / E*: Estimated)
YEARS FY15A FY16E FY17E
Net Sales 8170.34 9967.81 11622.47
EBITDA 7514.74 9170.39 10686.86
Net Profit 862.43 1174.03 1410.13
EPS 32.40 44.10 52.97
P/E 24.66 18.12 15.08
Shareholding Pattern (%)
1 Year Comparative Graph
CAN FIN HOMES LIMITED BSE SENSEX
SYNOPSIS
Can Fin Homes Ltd (CFHL) focus on individual loan
segment, which has a high growth potential, extend
its business operations in potential places and on
non-housing loans.
For Q1 FY16, Net profit stood at a record of Rs.
321.01 million against Rs. 189.58 million in the
corresponding quarter ending of previous year. An
increase of 69.33% y-o-y.
Net sales of the company rose by 37.80% y-o-y and
stood at a record of Rs. 2425.30 million for Q1 FY16
against Rs. 1760.01 million for the prior period Last
year.
In Q1 FY16, Earnings before Interest, Dep and Tax
was at Rs. 2241.34 million and against Rs. 1631.79
million in Q1 FY15. An increase of 37.35% y-o-y.
Profit before tax (PBT) at Rs. 506.93 million in Q1
FY16 compared to Rs. 290.98 million in Q1 FY15,
registered a growth of 74.21%.
Earning per Share of Rs. 12.06 for the 1st quarter of
FY16 as against an EPS of Rs. 9.25 in the
corresponding quarter of the previous year.
Can Fin Homes has a network of 107 branches & 25
Satellite Offices across 19 states as on 30th June,
2015.
Net Sales and PAT of the company are expected to
grow at a CAGR of 31% and 27% over 2014 to
2017E respectively.
PEER GROUPS CMP MARKET CAP EPS P/E (X) P/BV(X) DIVIDEND
Company Name (Rs.) Rs. in mn. (Rs.) Ratio Ratio (%)
Can Fin Homes Ltd 798.95 21268.05 32.40 24.66 2.76 70.00
Repco Home Finance Ltd 676.85 42211.00 19.74 34.29 4.88 15.00
Dewan Housing Finance Ltd 475.70 69354.60 44.41 10.71 1.50 60.00
LIC Housing Finance Ltd 492.80 248697.90 28.65 17.20 2.79 250.00

2. Analysis & Recommendation - ‘BUY’
For the quarter ended 30th June 2015, Can Fin Homes Ltd reported its net sales of Rs. 2425.30 million against Rs.
1760.01 million in previous year period, which represents growth of 37.80% y-o-y. For Q1 FY16, EBITDA was Rs.
2241.34 million, an increase of 37.35% against Rs. 1631.79 million in Q1 FY15. The company earned profit after
tax of Rs. 321.01 million, a growth of 69.33% y-o-y against Rs. 189.58 million in corresponding quarter of
previous year. Profit before Tax (PBT) at Rs. 506.93 million in Q1 FY16 as against Rs. 290.98 million in Q1 FY15,
registered a growth of 74.21% y-o-y. With a view to sustain and enhance its performance level, Company is
offering a range of housing as well as non-housing products, with more emphasis on marketing and customer
oriented business relationship.
The real estate sector witnessed a good growth in the last few years. The demand for commercial property is
being driven by the economic growth of the Country. As such, a sharp increase in demand for residential units
and also commercial real estate are foreseen. The Company would continue to give a more focused attention for
lending to individual loan segment, project loans and non-housing loans with an emphasis to further enhance its
market share in the housing market segment. Over FY2014-17E, we expect the company to post a CAGR of 31%
and 27% in its top-line and bottom-line respectively. Hence, we recommend ‘BUY’ for ‘CAN FIN HOMES LTD’
with a target price of Rs.910.00 for medium to long term investment.
QUARTERLY HIGHLIGHTS (PARENT BASIS)
Results updates- Q1 FY16,
Can Fin Homes Ltd’s main business is to provide
loans for the purchase and construction of
residential houses, 88% of loans are retail Individual
Housing Loans and reported its financial results for
the quarter ended 30th June, 2015.
Months June-15 June-14 % Change
Net Sales 2425.30 1760.01 37.80
PAT 321.01 189.58 69.33
EPS 12.06 9.25 30.30
EBITDA 2241.34 1631.79 37.35
The company has achieved a turnover of Rs. 2425.30 million for the 1st quarter of the financial year 2016 as
against Rs. 1760.01 million in the corresponding quarter of the previous year. In Q1 FY16, EBITDA stood at Rs.
2241.34 million and increase of 37.35% against the prior period previous year. In Q1 FY16, net profit of Rs.
321.01 million against Rs. 189.58 million in Q1 FY15. The company has reported an EPS of Rs. 12.06 for the 1st
quarter as against an EPS of Rs. 9.25 in the corresponding quarter of the previous year.

3. Break up of Expenditure
During Q1 FY16, total Expenditure rose up by 44% per cent mainly on account of employee benefits expenses by
32% to Rs. 71.02 million against Rs. 53.70 million in Q1 FY15. In Q1 FY16 other Expenses increased by 52% and
stood at Rs. 112.95 million against Rs. 74.51 million in Q1 FY15. Whereas Depreciation and amortization by 52%
to Rs. 7.35 million in 1st quarter of FY16 from Rs. 4.83 million over the Corresponding quarter of previous year.
Total expenditure in Q1 FY16 stood to Rs. 191.31 million as against Rs. 133.05 million in Q1 FY15.
COMPANY PROFILE
Can Fin Homes established in the year 1987, and is promoted by Canara Bank in association with reputed
financial institutions including HDFC and UTI. The relevance of having an exclusive outfit for providing housing
finance at a time when institutional finance was not flowing to the housing sector to the required extent and
banks had constraints in locking up funds in long term housing finance saw the birth of CFHL.
It was promoted in 1987, the "International Year for Shelter for the Homeless" by Canara Bank in association
with reputed financial institutions including HDFC and UTI. Can Fin Homes is the first bank sponsored Housing
Finance Company in India and one among the top players in the country's housing finance sector. The expertise
gained by us in housing finance over the years gives us the confidence to come up to expectations. A unique
personal touch in service makes us different from others.
CFHL was set up with the mission of promoting home ownership and increasing housing stock all over the
country. The housing finance company has a standing of over 27 years. It is one among the four HFCs selected by
NHB in its first phase of securitization programme has an all-India presence with a network of 107 branches &
25 Satellite Offices in over 19 states as on 30th June, 2015.

4. Business Areas
Non Housing Loan
• Personal Loan
• Site Loan
• Mortgage Loan
• Loan against Property
• Child Education Loan.
Housing Loans
• Loan for Rural Housing (LRH)
• Housing Loan Individual
• Home Loan for NRI.
Deposit Scheme
Can Fin Homes has the unique privilege of meeting the varied financial requirements of its customers, be it as a
reliable home finance provider or as a competent fixed deposit accepting company.
• Fixed Deposit
• Cumulative Deposit
• Fixed Deposit Scheme for Senior Citizen
• Cumulative Deposit Scheme for Senior Citizen
• Can fin Trust Fixed Deposit Scheme
• Can fin Trust Cumulative Deposit Scheme.
Recognitions
• CFHL enjoys 5 Star rating from NHB for the purpose of refinance.
• CFHL's Deposit programme enjoys 'MAA+' rating, which is the highest possible under high safety rating.
Location & Branches
• Chandigarh
• Noida
• Gurgaon
• New Delhi
• Jaipur
• Luck now
• Raipur
• Patna
• Ahmadabad
• Bhopal
• Indore
• Vadodara
• Bhubaneswar
• Mumbai
• Navi Mumbai
• Pune
• Hyderabad
• Visakhapatnam
• Vijayawada
• Goa
• Hubli
• Davangere
• Bangalore
• Mangalore
• Chennai
• Hosur
• Mysore
• Pondicherry
• Coimbatore
• Calicut
• Cochin
• Trichy
• Trichur
• Madurai
• Thiruvananthapuram.

5. FINANCIAL HIGHLIGHT (PARENT BASIS) (A*- Actual, E* -Estimations & Rs. In Millions)
Balance Sheet as at March 31, 2014A-2017E
CAN FIN HOMES LTD. FY-14A FY-15A FY-16E FY-17E
I EQUITY AND LIABILITES
1) Shareholder's Funds
a) Capital 204.88 266.22 204.88 204.88
b) Reserves and Surplus 4318.17 7448.65 8938.38 10547.29
Sub -Total- Shareholder fund 4523.05 7714.87 9143.26 10752.17
2) Share application money pedding allotment 0.00 4.76 5.33 4.80
3) Non Current Liabilities
a) Long- Term Borrowings 43287.95 54572.61 62976.79 71163.77
b) Differed Tax Liability 0.00 216.14 244.24 268.66
c) Long Term Provisions 407.59 539.41 0.00 0.00
Sub-Total -Non - Current liabilities 43695.54 55328.16 660.24 792.29
4) Current Liabilities
a) Short Term Borrowings 3658.92 14836.56 19050.14 22860.17
b) Other Current Liabilities 6731.07 4755.65 5088.55 5495.63
c)Short Term Provisions 507.88 703.54 900.53 1035.61
Sub-Total - Current Liabilities 10897.87 20295.75 25039.22 29391.41
TOTAL-EQUITY AND LIABILITES (1 + 2 + 3+4) 59116.46 83343.54 98069.08 112373.10
II ASSETS
1) Non- Current Assets
Fixed Assets
i. Tangible Assets 78.16 92.77 108.54 124.82
ii. Capital work in progress 0.00 0.00 0.00 0.00
a) Total Fixed Assets 78.16 92.77 108.54 124.82
b) Non-Current Investment 149.35 149.35 149.35 149.35
c) Deferred Tax Assets 48.65 0.00 0.00 0.00
d) Long Term Loans & Advances 58306.15 82069.75 96514.03 110576.12
Sub -Total- Non- Current Assets 58582.31 82311.87 96771.92 110850.29
2) Current Assets
a) Cash & Cash Equivalents 91.54 80.02 86.42 95.06
b) Short- Term Loans and Advances 438.05 948.38 1207.96 1424.69
c) Other Current Assets 4.56 3.27 2.78 3.06
Sub -Total Current Assets 534.15 1031.67 1297.16 1522.81
TOTAL-ASSETS(1 + 2) 59116.46 83343.54 98069.08 112373.10

6. Annual Profit & Loss Statement for the period of 2014A to 2017E
Value(Rs.in.mn) FY-14A FY-15A FY-16E FY-17E
Description 12m 12m 12m 12m
Net Sales 5780.04 8170.34 9967.81 11622.47
Other Income 0.00 0.00 0.00 0.00
Total Income 5780.04 8170.34 9967.81 11622.47
Expenditure -463.51 -655.60 -797.43 -935.61
Operating Profit 5316.53 7514.74 9170.39 10686.86
Interest -4227.67 -6102.90 -7231.94 -8352.89
Gross profit 1088.86 1411.84 1938.45 2333.98
Depreciation -20.10 -37.32 -41.80 -45.54
Exceptional Items -2.24 0.00 0.00 0.00
Profit Before Tax 1066.52 1374.52 1896.65 2288.43
Tax -309.40 -512.09 -722.63 -878.30
Net Profit 757.12 862.43 1174.03 1410.13
Equity capital 204.85 266.20 266.20 266.20
Reserves 4318.17 7448.65 8938.38 10547.29
Face value 10.00 10.00 10.00 10.00
EPS 36.96 32.40 44.10 52.97
Quarterly Profit & Loss Statement for the period of 31st Dec, 2014 to 30th Sep, 2015E
Value(Rs.in.mn) 31-Dec-14 31-Mar-15 30-Jun-15 30-Sep-15E
Description 3m 3m 3m 3m
Net sales 2155.23 2270.59 2425.30 2667.83
Other income 0.00 0.00 0.00 0.00
Total Income 2155.23 2270.59 2425.30 2667.83
Expenditure -145.04 -191.26 -183.96 -234.77
Operating profit 2010.19 2079.33 2241.34 2433.06
Interest -1600.33 -1676.04 -1727.06 -1892.86
Gross profit 409.86 403.29 514.28 540.20
Depreciation -9.99 -10.36 -7.35 -11.17
Profit Before Tax 399.87 392.93 506.93 529.03
Tax -140.37 -164.06 -185.92 -198.39
Net Profit 259.50 228.87 321.01 330.64
Equity capital 204.85 266.20 266.20 266.20
Face value 10.00 10.00 10.00 10.00
EPS 12.67 8.60 12.06 12.42

7. Ratio Analysis
Particulars FY-14A FY-15A FY-16E FY-17E
EPS (Rs.) 36.96 32.40 44.10 52.97
EBITDA Margin (%) 91.98% 91.98% 92.00% 91.95%
PBT Margin (%) 18.45% 16.82% 19.03% 19.69%
PAT Margin (%) 13.10% 10.56% 11.78% 12.13%
P/E Ratio (x) 21.62 24.66 18.12 15.08
ROE (%) 16.74% 11.18% 12.75% 13.04%
ROCE (%) 10.37% 9.79% 10.10% 10.24%
Debt Equity Ratio 10.38 9.00 8.91 8.70
EV/EBITDA (x) 11.89 12.06 11.25 10.78
Book Value (Rs.) 220.80 289.81 345.78 406.22
P/BV 3.62 2.76 2.31 1.97
Charts

8. OUTLOOK AND CONCLUSION
At the current market price of Rs. 798.95, the stock P/E ratio is at 18.12 x FY16E and 15.08 x FY17E
respectively.
Earning per share (EPS) of the company for the earnings for FY16E and FY17E is seen at Rs.44.10 and
Rs.52.97 respectively.
Net Sales and PAT of the company are expected to grow at a CAGR of 31% and 27% over 2014 to 2017E
respectively.
On the basis of EV/EBITDA, the stock trades at 11.25 x for FY16E and 10.10.78 x for FY17E.
Price to Book Value of the stock is expected to be at 2.31 x and 1.97 x respectively for FY16E and FY17E.
We recommend ‘BUY’ in this particular scrip with a target price of Rs.910.00 for Medium to Long term
investment.

9. INDUSTRY OVERVIEW
Global Economy:
The global economy continued to expand during 2014 at a moderate and uneven pace, as the prolonged
recovery process fro the global financial crises was still saddled with unfinished post- crises adjustments. Global
recovery was also hampered by some new challenges, including a number of unexpected shocks, such as
heightened geographical conflicts in various areas of the world.
Fiscal policy in the United States of America is expected to remain restrictive, but less severe than in 2014. Real
federal government spending is forecast to decline by less than 1 per cent in 2015–2016. It is also assumed that
the debt ceiling will be increased during the forecasting period.
In the baseline outlook, developing countries as a group are expected to grow at 4.8 and 5.1 per cent in 2015 and
2016, respectively, up from the 4.3 per cent estimated for 2014. Growth in the least developed countries (LDCs)
is expected to continue exceeding the global average, at 5.7 per cent in 2015 and 5.9 per cent in 2016. Among the
developed economies, the economy of United States, after some erratic fluctuations in 2014, is expected to
improve in 2015 and 2016, with GDP projected to expand by 2.8 and 3.1 per cent respectively.
Economic growth in South Asia is set to gradually pick up from an estimated 4.9 per cent in 2014 to 5.4 per cent
in 2015 and 5.7 per cent in 2016. While the recovery will be led by India, which accounts for about 70 per cent of
regional output, other economies such as Bangladesh and the Islamic Republic of Iran are also projected to see
stronger growth in the forecast period. Along with robust external demand, growth is expected to be
underpinned by a moderate strengthening of domestic consumptions and investments as countries bebifit from
improved macroeconomics conditions.
Financial Services
India has a diversified financial sector, which is undergoing rapid expansion. The sector comprises commercial
banks, insurance companies, non-banking financial companies, co-operatives, pension funds, mutual funds and
other smaller financial entities. The financial sector in India is predominantly a banking sector with commercial
banks accounting for more than 60 per cent of the total assets held by the financial system.
India's services sector has always served the country’s economy well, accounting for about 57 per cent of the
gross domestic product (GDP). In this regard, the financial services sector has been an important contributor.
The Government of India has introduced reforms to liberalise, regulate and enhance this industry. At present,
India is undoubtedly one of the world's most vibrant capital markets. Challenges remain, but the future of the
sector looks good. The advent of technology has also aided the growth of the industry. About 75 per cent of the

10. insurance policies sold by 2020 would, in one way or another, be influenced by digital channels during the pre-
purchase, purchase or renewal stages, as per a report by Boston Consulting Group (BCG) and Google India.
Market Size
The size of banking assets in India reached US$ 1.8 trillion in FY14 and is expected to touch US$ 28.5 trillion by
FY25. The Association of Mutual Funds in India (AMFI) data show that assets of the mutual fund industry have hit
an all-time high of about Rs 12 trillion (US$ 189.83 billion). Equity funds had inflows of Rs 52170.00 mn (US$
825.49 million), taking total inflows on a year-to-date basis to Rs 610890.00 mn (US$ 9.66 billion). Income funds
and liquid funds account for the largest proportion of AUM, with Income funds accounting for Rs 5.22 trillion
(US$ 82.59 billion) and equity funds accounting for Rs 3.06 trillion (US$ 48.41 billion).
Government Initiatives
Several measures have been outlined in the Union Budget 2014-15 that aim at reviving and accelerating
investment which, inter alia, include fiscal consolidation with emphasis on expenditure reforms and continuation
of fiscal reforms with rationalization of tax structure; fillip to industry and infrastructure, fiscal incentives and
concrete measures for transport, power, and other urban and rural infrastructure; measures for promotion of
foreign direct investment (FDI) in selected sectors, including defence manufacturing and insurance; and, steps to
augment low cost long-term foreign borrowings by Indian companies. Fiscal reforms have been bolstered further
by the recent deregulation of diesel prices. The launch of ‘Make in India’ global initiative is intended to invite
both domestic and foreign investors to invest in India. The aim of the programme is to project India as an
investment destination and develop, promote and market India as a leading manufacturing destination and as a
hub for design and information. The programme further aims to radically improve the Ease of Doing Business,
open FDI regime, improve the quality of infrastructure and make India a globally competitive manufacturing
destination.
Disclaimer:
This document is prepared by our research analysts and it does not constitute an offer or solicitation for the
purchase or sale of any financial instrument or as an official confirmation of any transaction. The information
contained herein is from publicly available data or other sources believed to be reliable but we do not represent that
it is accurate or complete and it should not be relied on as such. Firstcall Research or any of its affiliates shall not be
in any way responsible for any loss or damage that may arise to any person from any inadvertent error in the
information contained in this report. Firstcall Research and/ or its affiliates and/or employees will not be liable for
the recipients’ investment decision based on this document.

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