Saturday, April 20, 2013
Canfin Homes is the housing finance arm of Canara bank .Company’s major concentration is in south India especially Bangalore .Till 2012 company’s growth was very slow ,but from 2012 onwards management turned aggressive in expanding branch network.Company opened 17 new branches in 2012-13 FY alone and the total branches are 69 now.This number is very important when we consider the fact that ,for the past 25 years ( 1987 to 2012 ) company started just 52 branches only. Company concentrating in retail loan ,and percentage of corporate loan is very low . About 95 per cent of the advances given to employed people and the average loan size is Rs. 15 lakh.This help the company to keep a very good asset quality where its Gross NPA is below 1 % and net NPA is Zero.Company is expected to report a CAGR of 40-45% in disbursements for FY12-14.Company’s net interest margin is one of the best in the industry. Since company reported a boring growth rate for past many years ,investors does not consider Canfin as a serious player in this sector and ignored this stock till now.But if the recent efforts by the management is any indication for their future plans ,there is very good chance for a sharp re- rating in coming years.Company’s stock is currently trading around Rs.145 where its book value will be close to Rs.185 by the year end .Company is an uninterrupted dividend payer which declared 30 % in last FY.Canfin Homes reported a profit of Rs.43 Cr and an EPS of Rs.21 in FY 2012. Company is expected to report an EPS of Rs.33 and Rs.40 each in FY 14 and FY 15 .At current market of Rs.145 even low risk investors can consider this stock with a long term view.
Link to company website HERE