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M.Cap. (Rs cr) 4,859 FY17E 472 221 83 42 21.9 402 4.5 1.8 22.7
M.Cap. (US$ b) 73 FY18E 642 309 116 39 15.7 504 3.6 2.0 25.6
Result Highlights: In-line; Loan growth remains robust at 28%; NIMs expand 32bp YoY to 3.5%; PAT grows by 41%
Can Fin's Net Income at INR 119cr grew by 30% YoY on the back of 28% growth in loan book and 32bp expansion in NIMs
to 3.5% on a YoY basis. NIMs expanded 5bp QoQ. Growth in loans sanctioned (YoY) dipped slightly from 37% in 1HFY17 to
24% in the current quarter owing to demonetisation; however we believe it will bounce back to closer to 30% levels over the
next couple of quarters as over 3/4th of the loan book comprises of salaried borrowers who would not be impacted by
demonetisation in any way.
Lower OPEX led to a strong growth in Pre Provisioning Profits at INR 103cr, an increase of 32% YoY. Provisioning reduced
from INR 10cr to INR 9cr on YoY basis. Consequently profits grew by 41% to INR 59.6cr, which is in line with our estimate.
The borrowing profile has been shifting in favor of borrowings from NCDs/CPs/public deposits which stood at 48% as on
3QFY17 against 43% in 3QFY16. This is reflected in the expansion in spreads from 2.22% in 3QFY16 to 2.52% in 3QFY17.
We expect this trend of expansion in spreads to continue in FY18E as well.
Asset quality remains impeccable with GNPAs of 0.24% v/s 0.27% on a YoY basis. As 77% of AUM is towards the salaried
class, the company is largely immune to any impact on the asset quality front. On top of this, the LAP and builder portfolios
comprise of just 6% and 0.2% respectively, which gives us comfort in rating Can Fin as one of our top picks.