Can Fin Homes Q4 FY25 Results: Strong Growth and Clear Plans for FY26

Can Fin Homes Q4 FY25 Summary: Growth, Stability, and Clear Plans Ahead

Can Fin Homes has shared its Q4 results for FY25, and the numbers show strong growth, stable asset quality, and solid future plans. This article breaks down the key points in simple terms so you can understand what’s happening at Can Fin Homes and where the company is heading.

Disbursement Growth and Regional Performance

In Q4 FY25, Can Fin Homes saw a 31% increase in disbursements compared to the previous quarter. This growth was driven by a strong recovery in different regions of India.

Karnataka Performance

Karnataka saw the most noticeable recovery. Disbursements in this region jumped by around ₹200 crore. In January and February, the monthly figure reached ₹200 crore, and in March, it rose to ₹300 crore. One of the reasons for this growth was the resolution of the E-Khata issue within Bengaluru.

Performance in Other States

• North India: Disbursements grew by 36% compared to last year.
• West India: Saw a 16% increase year-on-year.
• Tamil Nadu: Recorded 27% YoY growth.
• Telangana: Monthly disbursements went from ₹70 crore to more than ₹100 crore. This region is expected to grow by 15–20% in FY26.

FY26 Disbursement Target

Can Fin Homes aims to increase disbursements by 20% in FY26. Every major region is expected to contribute to this target.

Asset Quality and Loan Provisions

Maintaining good asset quality is important for any housing finance company. Can Fin Homes has managed this well.

SMA-0 Loans

There was a noticeable drop of ₹700–750 crore in SMA-0 loans during Q4. These are accounts that show early signs of repayment trouble. The reduction followed a spike in the previous quarter due to changes in how such accounts are tracked.

Gross NPA (GNPA)

The GNPA fell to 0.87%, which is better than the company’s own target ceiling of 0.90%. This means the number of bad loans is well under control.

Loan Loss Provisions

• A ₹10 crore write-back was done in Q4, meaning some previously kept funds for bad loans were no longer needed.
• At the same time, the company increased its precautionary buffer (called overlay) by ₹25 crore, bringing the total overlay to ₹59.28 crore.
• The credit cost (excluding overlay) was 13 basis points for FY25, which is lower than the 15 bps the company had estimated.

Restructured Loan Pool

The pool of restructured loans came down from ₹720 crore to ₹480 crore. The non-performing portion within this pool also decreased from 18% to 17%.

The overlay is not linked to any specific risk but is a safety net for future uncertainties.

Product Portfolio and Customer Focus

Can Fin Homes is slowly adjusting its product and customer mix to reduce risks and improve long-term growth.

Housing vs. Non-Housing

Housing loans, including loans for commercial real estate, now make up 85% of the total loan book. This is down from 89% two years ago. The company plans to bring this down to 80% in the next three years by focusing more on non-housing loans.

Salaried vs. Self-Employed

The ratio of salaried to self-employed borrowers changed slightly from 72:28 to 70:30. The company wants to achieve a 65:35 ratio eventually, aiming for a more balanced customer base.

Branch Expansion

Fifteen new branches were opened in FY25, bringing the total to 234. Another 15 branches are planned for FY26, taking the expected total to 249.

Direct Sourcing vs. DSAs

Currently, 80% of the business comes through direct selling agents (DSAs), down from 82%. Direct sourcing is increasing slowly, but it’s still not a big portion yet.

Margins, Profits, and Dividend

Can Fin Homes continues to be profitable while keeping its costs and margins stable.

Spread and NIM

For FY26, the company expects to maintain a spread (difference between loan interest and borrowing cost) of over 2.5% and a Net Interest Margin (NIM) above 3.5%.

Profit Milestone

For the first time, the company’s profit before tax crossed ₹1,000 crore in a year—a major achievement.

Return Metrics

• ROA (Return on Assets): Targeted at 2.1% to 2.2% for FY26.
• ROE (Return on Equity): Expected to be around 17%.

Dividend Payout

The dividend payout has increased over the years. Three years ago, it was just 7–8%. Now, it stands at around 19%. The company aims to keep it in the 18–20% range.

Borrowing Cost, Funds, and Liquidity

Managing borrowing costs is key for a finance company. Can Fin Homes is doing this efficiently.

Impact of Rate Cuts

Two repo rate cuts in February and April 2025 helped reduce borrowing costs. Around 55% of the company’s borrowings are linked to repo rates.

Commercial Paper Rates

Rates for short-term borrowings (commercial papers) have fallen from 7.3–7.4% to below 7% in April.

Pass-Through Strategy

Even though borrowing costs have come down, Can Fin Homes will only pass on the rate cut benefits to customers after fully seeing the impact on its own costs. This helps keep margins stable in the short term.

Capital Market Borrowing

Regulations now require 25% of incremental borrowings to be raised through capital markets. Currently, the company is at 19% and plans to raise this further.

Liquidity Coverage Ratio (LCR)

To meet the new LCR rules, the company invested an extra ₹400 crore during FY25. Its LCR now stands at 80%, showing strong liquidity.

Cost Control and Technology Upgrade

Can Fin Homes is managing its operating expenses smartly while investing in technology.

Operating Expenses (OPEX)

There were no major one-time costs in Q4. The overlay provision was recorded under impairment and not as an operating expense.

Cost-to-Income Ratio

For FY26, the company expects this ratio to be around 17%. In FY27, it might go up to 18% because of technology upgrades.

Core Banking System (CBS)

A new CBS was awarded in January 2025. It is expected to go live in Q3 FY26. The implementation will take 12 months, followed by 3 months of support to ensure smooth functioning.

Regional Insights

Each region has its own growth story.

Karnataka

Monthly disbursements in Karnataka are now back to ₹275 crore. The company expects things in UDA and Panchayat areas to be back to normal by the first quarter of FY26.

Telangana

This region had slowed earlier due to negative market sentiment. But now, it is showing signs of recovery. A low base will help it grow faster in FY26.

Loan Book Growth

To grow its total assets under management (AUM) by 15%, the company needs to make disbursements equal to 35–36% of its existing loan book. This is because loans are also repaid (or “run down”) at a rate of around 16% per year.

Risk and Collection Strategy

Can Fin Homes has increased its efforts to track and manage loan risks.

Monitoring High-Risk Areas

The company has added more staff at branches with higher risk. It has also expanded its call center and skip-tracing teams to locate customers who miss payments.

Follow-up on early-stage delayed accounts (SMA-0) now begins by the 15th of each month.

Loan Segments

So far, there is no major stress in any loan segment. This includes housing loans, non-housing loans, restructured loans, and loans from different regions.

Other Key Updates

Here are a few more important points from the Q4 update.

• The sales team brought in ₹100 crore in Q4, up from ₹60 crore in Q3.
• Income from investments was not shared on the earnings call and will be released separately.
• Disbursements in Q1 are usually slow. But in FY26, Q1 is expected to grow 20% compared to last year.

What the Management Said

The leadership team at Can Fin Homes sounded confident during the earnings call.

Growth Focus

The company confirmed its plan to grow disbursements by 20% in FY26. They didn’t flag any major risks or problems either at the macro level or within their loan portfolio.

Risk Approach

Can Fin Homes plans to keep its buffer provisions (overlays) to stay safe. It also mentioned that there is no pricing pressure from competitors and no significant balance transfer issues.

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Final Thoughts

Can Fin Homes has delivered strong Q4 results. It showed good growth in disbursements, managed loan quality well, and kept its profit margins intact. With stable operations, a growing regional presence, and better technology on the way, the company looks set for a solid FY26.

Its smart risk management, balanced customer strategy, and focus on core business make Can Fin Homes a reliable name in the housing finance sector.

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Frequently Asked Questions (FAQ)

1. What is Can Fin Homes’ disbursement growth target for FY26?
The company is aiming for a 20% increase in disbursements.

2. How is Can Fin Homes managing asset quality?
It has reduced SMA-0 accounts and brought its GNPA down to 0.87%, showing strong control over loan quality.

3. Will customers see lower loan interest rates soon?
The company will pass on interest rate cuts to customers only after its own borrowing costs go down fully.

4. What is the future plan for branch expansion?
Can Fin Homes plans to open 15 more branches in FY26, taking the total to 249.

5. How is the company using technology for growth?
A new Core Banking System will go live in Q3 FY26, improving operational efficiency.

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