Mehabe score: 5 G Factor: 4 Piotski Score: 4 The stock has a rating OBSERVE & HOLD. The mehabe team score is reflective of its fundamental and technical merits. A rating above 8 is considered good buy. The stock has a G-Factor of 4 and Piotski score of 4.
Description
Can Fin Homes Ltd. is a public deposit-taking housing finance company promoted by Canara Bank in 1987, It focuses on funding to low & middle group individuals & first-time homebuyers preferably salaried or professional. However, since 2014 it is also increasing exposure to self-employed professionals & non-professionals. #
Main Points
Increase in Branch network
Branch network increased from 140 (Mar 16) to 198 as on Dec 20 (184 branches+ 21 affordable housing loan centers + 14 satellite offices) over 100 cities spread across 21 states.
The total no of employees increased from 205 (Mar 10) to 838 (Dec 20)Site:CANFINHOMEMain Symbol:CANFINHOME
Stock trades at 544.0, above its 50dma 528.58. It also trades above its 200dma 500.31. The stock remains bullish on techicals
The 52 week high is at 619.90 and the 52week low is at 357.95
Price Chart
P/E Chart
Sales and Margin
Strengths
– ‘s median sales growth is 23.77% of last 10 years
Weakness
– Stock is trading at 2.78 times its book value
– has low interest coverage ratio.
-Promoter holding is low: 29.99%
– might be capitalizing the interest cost
Competition
– The industry trades at a mean P/E of 29.2x. AAVAS Financiers trades at the industry’s max P/E of 74.03x. CANFINHOME trades at a P/E of 15.9x
– Industry’s mean G-Factor is 4.6 while the mean Piotski score is 8.0. CANFINHOME has a G-Factor of 4 and Piotski scoreof 4.
– Average 1 month return for industry is -0.6%. The max 1- month return was given by AAVAS Financiers: a return of 7.1 %
Quarterly Results
Sales for period ended Jun 2021 is Rs 451.0 cr compared to Rs 522.0 cr for period ended Jun 2020, a fall of 13.6%
Operating Profits reported at Rs 34.0 cr for period ended Jun 2021 vis-vis 63.0 for period ended Jun 2020 .
Operating Margins contracted -453.0 bps for period ended Jun 2021 vis-vis Jun 2020 .
The EPS for Jun 2021 was Rs 8.17 compared to Rs 7.7 for previous quarter ended Mar 2021 and Rs 7.0 for Jun 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 1947.0 cr for period ended TTM vis-vis sales of Rs 2018.0 cr for the period ended Mar 2021, a fall of 3.6%. The 3 year sales cagr stood at 4.1%.
Operating margins expanded to 647.0% for period ended TTM vis-vis 627.0% for period ended Mar 2021, expansion of 2000.0 bps.
Net Profit reported at Rs 472.0 cr for period ended TTM vis-vis sales of Rs 456.0 cr for the period ended Mar 2021, rising 3.4%.
Company recorded a healthy Net Profit CAGR of 16.7% over the last 3 years
Balance Sheet Statement
Cash Flow Statement
Cash Flow comments
CashFlow from operating activities: Rs -851.0 cr for period ended Mar 2021 vis-vis Rs -1842.0 cr for period ended Mar 2020
Sales Growth
Profit Growth Statement
Profit Growth Statement
Stock Price CAGR
Return of Equity
General Comments
– The company has had stable/constant Return on Equity (RoE) metric. The RoE on Last Year basis was 19.0% compared to 19.0% over the last 3 Years. – The stock has given a return of 44% on a 1 Year basis vis-vis a return of 18% over the last 3 Years. – The compounded sales growth on a TTM bassis is -1% vis-vis a compounded sales growth of 10% over the last 3 Years. – The compounded profit growth on a TTM basis is 21% vis-vis a compounded profit growth of 17% over the last 3 Years.
Ratios
Shareholding Pattern
– Public shareholding has remained largely constant. The Jun 2021 public holding stood at 52.7% vis-vis 52.63% for Mar 2021
Conclusion
– ‘s median sales growth is 23.77% of last 10 years – Stock is trading at 2.78 times its book value
– has low interest coverage ratio.
-Promoter holding is low: 29.99%
– might be capitalizing the interest cost
Fundamentally, the stock remains weak on business fundamentals. Weak near term results have dampened and questioned business drivers. We suggest to wait for a upturn in business performance.
Technically, the stock trades above its 50 DMA 528.58 and is trading at 544.0 It has shown near term bullish momentum contrary to business fundamentals. We suggest to observe price action. However as investors, who like to avoid timing the markets, we suggest to avoid the stock
