Saturday, April 20, 2013

CANFIN HOMES - BUY







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

36 comments :

  1. Dear Sir,
    What is view on LIC housing finance and IL & FS investment manager for long term??

    ReplyDelete
  2. Sir, do you like GIC Housing Finance also?

    ReplyDelete
    Replies
    1. Ok, but prefer Canfin over GICHF

      Delete
    2. Dear sir,

      May I know the reason for your preference of Canfin over GICHF?

      Delete
  3. Dear v.p sir thanks for your recommendation. I want to know how will be singer India for long term view? It is a good tern around story. recently it come out of Bfir.

    ReplyDelete
    Replies
    1. Not strictly tracking Singer.Not seeing much prospects for its sewing machine business going forward.Success depends on the scalability of household appliances business but that too may not be easy considering the prevailing competition .

      Delete
  4. What's about pnb gilt?

    ReplyDelete
  5. sir,

    I want to know the status of JK AGRO seeds which have changed their name to florence investech it is more than 5months it is not listed/traded any info from you would appreciate.

    Thanking you,
    Regards
    Arjun.

    ReplyDelete
    Replies
    1. Stock will re-list once the company gets permission from exchange post scheme of arrangement.

      Delete
  6. Great pick sir its early stage identification of stock ... which will do well... especially the information about canara bank was very good...
    thank you sir,
    Rahul

    ReplyDelete
  7. Dear sir,
    Want to know your view on metal stocks like Hindalco, TISCO. STERLITE @cmp. for long term.
    Thanks

    ReplyDelete
    Replies
    1. Start buying metal stocks if ready to hold for long term.

      Delete
  8. Sir,
    Few months back there was a recommendation of stock named Bambino Agro. I had purchased at that time at around 70 RS. Can we average more at current levels.

    Also, could you guide us on developments if any in this company

    thanks

    ReplyDelete
    Replies
    1. Positive on company .This stock included in periodic call auction so liquidity may be an issue.

      Delete
  9. Sir,
    need ur opinion on Cravatex and Photoquip?

    ReplyDelete
  10. VP Sir,

    Do you think that Kopran will turnaround and do well in the long run? What are the possible risks in the stock?

    ReplyDelete
    Replies
    1. Turnaround is possible ,company having some accumulated loss.

      Delete
  11. Do you have any input on Nagarjuna Fertilizer(Kakinada..) relisting date...No actual input on relisting date. Lot of

    ReplyDelete
  12. Sir how is the performance of Ion exchange and KSB pumps... will the share price go up ?.... for the past few months its going lower....

    Thanks,
    Rahul

    ReplyDelete
  13. Sir,

    please give your opinion on Shilp Gravures ?

    ReplyDelete
    Replies
    1. Better choices may be available in this market

      Delete
  14. VP sir,
    I am a new visitor to your blog. You are doing a great job.
    Are Mangalam cements and Panacea still a good buy? I noticed they took a heavy dip and just started moving up. Please suggest.

    Harsha

    ReplyDelete
    Replies
    1. Hope both will grow better in long term

      Delete
  15. VP Sir,

    Great pick. The only question or discomfort i have with Can Fin home is that it had a pretty stagnant Sales for last 4 years. Do we have any idea if new branches will be opened consistently for next 3 or 4 or 10 years?i mean what should could be considered a good assumption about growth for next 5 years.

    Ravi

    ReplyDelete
    Replies
    1. In a latest interview ,company officials claiming that they are planning aggressive network expansion in coming years.

      Delete
  16. SIR the drug inspectors of chenni filed a case on PANACEA regarding vaccine labeling and bluffing of consumers by changing of labels what do you feel about that case?
    thank u
    p@w@n

    ReplyDelete
    Replies
    1. Explanation by the company as follows :

      Panacea officials said the company applied to the Central Drugs Standard Control Organisation (CDSCO) in 2008 to extend the shelf life of the vaccine from 24 months to 36 months after extensive tests. "The tests showed the vaccine had the stability required," a Panacea official said. "The vaccines were tested at the Central Research Institute, Kasauli. CDSCO gave the company permission to extend the vaccine's shelf life on September 10, 2010."

      "The medicines should be stored at temperatures between 2oC and 8oC," he said. "We would have had to remove the vials from refrigeration to remove the old labels. This could have led to contamination."

      Delete
  17. dear value pick sir we are in diloma with this illiquid call aution. sir can we hold those stocks or exist ? if we hold for longterm after their growth in business market will identify them or not? market people will dare to buy irrespective of call aution or not? they become multibagers in future or not? please clarify sir.

    ReplyDelete
    Replies
    1. Dear Vishal

      As you are aware,retail investors participation in small and mid caps investment is comparatively higher than the participation of institutional investors in this segment .But many of them are not familiar with this method .So this system may take much more time to get an acceptability among them and we can't predict when it will happen.

      Delete
  18. Dear VP,

    Any view on Caplin Labs ..Pls advice, Planning to buy the stock

    ReplyDelete
  19. Dear Sir,

    Can you advice about L&T Finance @75

    ReplyDelete

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