Can Fin Homes Ltd (CANFINHOME) Q1 FY27 Earnings Call: Disbursements Exceed Rs. 2,500 Cr Guidance, NIM Surpasses 3.75% Guidance

Can Fin Homes Ltd held its Q1 FY27 earnings call on July 18, 2026. Here's a quick read of what management said — performance, strategy, and the outlook ahead.

Headline Performance & Key Metrics

• Disbursements of Rs.2,609 Cr in Q1 FY27 exceeded the guided Rs.2,500 Cr, registering 29% YoY growth over Q1 FY26.
• NIM of 3.81% in Q1 FY27 surpassed the 3.75% guidance, supported by a stable yield of 9.81% and a lower cost of borrowing of 6.98%.
• ROA of 2.39% and ROE of 18%+ in Q1 FY27 were down from 2.53% in Q1 FY26 due to higher opex, but management reaffirmed the aspirational guidance of 2.4% ROA / 18% ROE for FY27.
• NPA addition of Rs.17–18 Cr in Q1 FY27 was significantly lower than the ~Rs.40 Cr seen in Q1 of the prior two years, reflecting improved asset quality.
• Asset quality improved with Stage 2 and Stage 3 delinquencies declining in absolute terms vs. March FY26, and credit cost guidance reaffirmed at ~10 bps for FY27.

AUM Trajectory & Disbursement Outlook

• AUM growth guidance of ~14% for FY27 was maintained, implying ~Rs.6,000 Cr of net accretion, despite a higher-than-expected total book run-down of Rs.1,857 Cr in Q1.
• Full-year disbursement target of Rs.13,000 Cr for FY27 was set, with a Q2 FY27 target of Rs.3,000 Cr despite the company-wide IT rollout across 245 branches.
• Home loans grew 28% YoY (Rs.1,650 Cr) and non-home loans grew 32% YoY (Rs.958 Cr) in Q1 FY27, with the salaried segment growing 21% and self-employed growing 44%.
• Management may push disbursements to Rs.13,200–13,400 Cr if needed to meet the ~14% AUM growth target.
• Geography-wise growth was broad-based, with Karnataka the weakest zone at 18% growth; all six zones reported positive growth.

Net Interest Margin & Cost of Funds

• Blended cost of funds stood at 9.81% in Q1 FY27, nearly unchanged from 9.82% in Q1 FY26, but incremental bank borrowing costs rose to 7.25%–7.5% from ~6.95%.
• Management expects to maintain NIM at ~3.8%+ through better product/segment mix and minimal incremental borrowing cost increases.
• Pricing ranges from 8.4% (salaried, CIBIL >725, ticket >Rs.25 lakh) to ~12.5% (non-salaried, non-housing, S3 rating), with the loan mix shifting toward higher ticket sizes.
• Self-employed (SCNP) segment yields are ~0.5% higher than salaried housing loans, with GNPA of 1.45–1.5% vs. 0.6–0.63% for salaried; management sees this as margin-accretive.
• Tax rate guided at 21% for FY27.

Run-Down Dynamics & Competitive Response

• Total book run-down of Rs.1,857 Cr in Q1 FY27 was driven by Rs.408 Cr in balance transfers out (BTO) and the remainder from customer-led closures and amortization.
• Rate differential widens to >100 bps — "Bajaj Housing Finance cited as a key competitor growing 25–30%", attributed to its technology advantage, while LIC Housing Finance faces similar prepayment pressures; Can Fin Homes' best lending rate of 8.4% vs. banks at 7.15%–7.25% is hurting customer retention.
• Management is working on retaining prepaying customers via deposit products and credit bureau alerts.
• IT sector exposure is only 6% of the customer base, and no material disruption has been seen from IT job losses in Karnataka/Telangana.

Technology Rollout & Operating Leverage

• IT system (LOS/LMS) pilot completed across 5 branches on 8 July (early Q2 FY27), with all transactions processed without material issues.
• Management plans to implement the system across the remaining 245 branches during Q2 FY27, rolling out at month-ends (July, August, September).
• CEO Suresh Iyer stated a progress update on the IT transformation will be released around mid-September 2026, based on the five branches already live.
• Cost-to-income ratio is expected to remain ~19.5% for FY27, then decline to ~18% over the next three years as book growth absorbs fixed costs.
• The Rs.40 Cr IT implementation cost is yet to be fully capitalised, with some AMCs already impacting Q1 FY27.

Conservative Underwriting & Asset Quality

• Cumulative credit write-offs since 2001 stand at just Rs.20 Cr, reflecting conservative underwriting; an additional Rs.50–60 Cr in fraud accounts remain as NPAs with 100% provisioning.
• 82% of loans have a CIBIL score above 700 as of Q1 FY27, up from ~75% previously, reflecting improved customer selection.
• NACH bounce rates have declined over the last six quarters, and management converted older non-NACH cases to NACH.
• Credit cost guidance reaffirmed at ~10 bps for FY27, contingent on maintaining NIMs and benign credit conditions.
• Management added 160 APS projects in Q1 FY27, bringing the total approved projects to 331 as of quarter-end.