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Informist, Monday, Jul. 20, 2026

 

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--Can Fin Homes:All bank loans floating rate; no change in borrowing rate Q1
--Can Fin Homes: Banks currently cheapest source of funding
--Can Fin Homes: Confident on maintaining NIM at above 3.8%
--Can Fin Homes:Should be able to maintain credit cost at guidance of 10 bps
--Can Fin Homes: Plan to upgrade all 250 branches to newer IT platform by Q2
--Can Fin Homes: No change in business activity from IT overhaul of branches 
--Can Fin Homes: Have not seen stress in loans despite IT sector layoffs
--Can Fin Homes: Only 6% of customers employed in IT sector
--Can Fin Homes: Aim to increase AUM size by INR 60 billion by Mar
--Can Fin Homes: To see cost-to-income benefit FY27 due to IT overhaul
--Can Fin Homes Apr-Jun net interest margin 3.81% vs 3.64% year ago
--Can Fin Homes outstanding loan book INR 429.61 bln on Jun 30, up 10.8% YoY
--Can Fin Homes Apr-Jun cost of funds 6.98% vs 7.07% qtr ago
--Can Fin Homes Q1 net interest income INR 4.27 bln vs INR 3.63 bln yr ago

 

By Shweta and Aaryan Khanna

 

NEW DELHI – Can Fin Homes Ltd. is optimistic about keeping its net interest margin above 3.8% for 2026-27 (Apr-Mar), the financier's management said Monday. The management had given net interest margin guidance of 3.75% for the current financial year. Its net interest margins were 3.81% at the end of June, lower than 3.93% a quarter ago but higher than 3.64% at the end of June 2025.

 

"We are confident that the NIM will be maintained at 3.8% plus and we should not have a problem in that," the management said in its post-earnings conference call. The banks' lending rates have not been changed in view of the Reserve Bank of India keeping its repo rate unchanged at 5.25% since December. In fact, the company's management sees loans from banks as the "cheapest option", other than commercial papers, at present for lending purposes.

 

"Based on the bank borrowings also, there will be a very marginal increase only in cost because of the incremental loans, not on the existing loans," the management said. "So keeping that in mind, we are confident we should be able to maintain the spread and the NIM because on the yield side also, we have a couple of opportunities available because of our change in mix, product mix and segment mix."

 

"Going forward, we know we have a good amount of sanctions on hand from banks. And of course, NCDs (Non-Convertible Debenture) and CPs (commercial papers) are also there," the company's management added. 

 

 

All of the non-bank financier's term loans are linked to the policy repo rate or the Treasury bill rate, which would be affected by repricing of banks' marginal cost-of-funds-based lending rate, Can Fin Homes said. In Apr-Jun, the cost of funds fell to 6.98% from 7.07% a quarter ago and 7.47% from a year ago. Even as older borrowing costs remain in check, incremental loans may marginally add to costs in the September quarter because the borrowing cost for the housing lender had increased to 7.25-7.50% from 6.95% a year ago, Managing Director and Chief Executive Officer Suresh Iyer said.

 

COSTS, DELINQUENCIES

Addressing analyst concerns about the impact of its modernisation campaign, Iyer said five branches had undergone the information technology overhaul in July, with all 250 branches expected to get the upgrades by the end of the September quarter. The management had laid out plans for a full-scale overhaul of its IT network from a legacy system. The five branches had initial teething problems but the rate of business growth had returned to normal levels less than two weeks after implementation, Iyer said.

 

The home financier's cost-to-income ratio is likely to benefit within the current financial year ending March, the management said. More branches will be added monthly to the overhaul, with management expecting full stability within six months. Can Fin Homes planned to reduce its staff costs and reduce hiring in sales roles with the technological overhaul, with the current sales team also likely to be re-designated once productivity improves, the management said. 

 

Iyer expected Can Fin Homes to retain its cost-to-income ratio at around 19.5% for FY27, similar to the June quarter's figure of 19.52%. The firm had already realised costs in prior quarters when it came to IT infrastructure. Going ahead, operating expenses will likely be in a similar range with no fresh large outlays scheduled, beyond the routine costs on employee salaries and rent, he said.

 

Credit costs would also remain marginal at 10 basis points, as guided for earlier, the management said. The Bengaluru-headquartered lender had seen no increase in delinquencies linked to its core business base in southern India, especially in around Karnataka's capital. Moreover, concentration risks were minimal, the CEO highlighted – only 6% of its customers had employed linked to the IT sector, which had seen several rounds of layoffs in the last few months.

 

The sequential increase in gross non-perfoming assets in the reporting quarter, up to INR 3.76 billion from Jun. 30 to INR 3.57 billion, was largely driven by corresponding fall in special mention accounts – 1 and 2, the management said. The lender had implemented early warning systems in its workflows recently to increase the monitoring of stressed assets before they turned non-performing.

 

BUSINESS GROWTH

The management reiterated its goal to increase its asset under management by INR 60 billion in FY27, up 14% on year from the Mar. 31 figure of INR 422.09 billion. At the end of June, the outstanding loan book was up only 10.8% on year at INR 429.61 billion. The lender had faced higher redemptions in the June quarter which it was able to offset by stepping up disbursements. For the September quarter, Can Fin Homes was targetting a disbursement of INR 30 billion, up from INR 26.09 billion in the reporting quarter.

 

"So, if required, we may have to push business. I think we should be able to do that. And already in Q1 (Apr-Jun), we have overshot whatever we had targeted for," Iyer told analysts. "And I think the way our IT transformation has gone, we may be able to push a little earlier than what we had anticipated."

 

The home financer's bottom line rose 20% on year to INR 2.68 billion in the June quarter, it reported Saturday. The net interest income was up 18% on year to INR 4.27 billion. Shares of Can Fin Homes ended 3.6% lower at INR 857.13 on the National Stock Exchange Monday.  End

 

Edited by Akul Nishant Akhoury

 

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