Can Fin Homes achieves record Q1 disbursements, sees delinquency reduction and plans aggressive expansion
The announcement details Q1 FY26 financial and operational performance, including record disbursements, improved asset quality, and strategic growth initiatives such as branch expansion and sales team increase. It also provides future guidance on disbursements, margins, and AUM growth, which are key indicators for investors.
The company reported record Q1 disbursements and a significant reduction in total delinquency, reaching a five-quarter low. Management expressed confidence in achieving full-year disbursement targets and AUM growth, supported by strategic initiatives like branch expansion, increased sales force, and expected further reductions in borrowing costs.
Can Fin Homes Limited announced its Q1 FY26 earnings, highlighting several key developments and future outlook: * Disbursement Growth: For the first time in the company's history, Q1 disbursements crossed ₹2,000 crore, marking a 9% growth. North, West, and Tamil Nadu zones continued strong momentum, while the East zone also showed over 40% growth. Telangana continued to show negative growth, and Karnataka remained flat due to ongoing e-khata issues, though state government initiatives are expected to resolve this. * Asset Quality Improvement: Total delinquency (SMA-0, SMA-1, SMA-2, and NPA combined) decreased by ₹280 crore compared to March '25, reaching its lowest percentage in the last five quarters. While NPA increased sequentially by ₹45 crore, the company identified 96 sticky accounts totaling ₹13.90 crore for targeted recovery. * Operational Expansion: The company plans to open 15 new branches in FY26, primarily in the West and North, aiming for a total of 300 branches by FY28. The sales team strength has been increased to 100 people (from 39) to boost direct business, contributing 5% of incremental business in Q1. DSA dependence marginally reduced to 79%. * Cost of Borrowing & Lending Rates: Following repo rate reductions, the cost of borrowing has decreased. Can Fin Homes passed on a total of 25 basis points (bps) rate cut to customers (10 bps in May and an additional 15 bps in July). Further reductions are expected from bank term loans (₹2,500 crore to ₹3,000 crore) and potential NHB PLR review. * Cost-to-Income Ratio: The ratio was slightly elevated due to a salary revision for staff (with a one-time actuarial impact of ₹4.5 crore) and increased rent and taxes from the 25 new branches and six zonal offices opened last year. * Future Guidance: Management maintained credit cost guidance at 15 bps. Q2 FY26 disbursement target is set at ₹2,500 crore plus, with an overall FY26 disbursement guidance of ₹10,500 crore. NIM and spread guidance remain at 3.5% and 2.5% respectively, with ROA at 2.2% and ROE at 17%. AUM growth is projected to be 12%-13% in FY26, potentially rising to 15% next year. * Technology Upgrade: The IT transformation project is on track, with ALM and treasury modules planned for August/September and core LOS/LMS/DMS and deposits in November (Q3 FY26). * Dividend Policy: The company aims to maintain a dividend payout in the range of 18%-20%.
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Can Fin Homes Limited filed this with the NSE as a statutory disclosure, categorised under results. It is a primary document, not a recommendation, and the desk marks it high impact, which is the band that most often changes something.
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