Can Fin Homes reported strong Q2 FY26 results, with disbursement crossing INR2,500 crores. Karnataka saw significant growth, reaching INR270 crores in September. While AUM growth was slightly lower due to higher prepayments, delinquency reduced to INR3,850 crores. NIM improved, and the company expects further delinquency reduction in Q3. The IT transformation remains on track. The company guides for a 12-13% AUM growth for the year.
Financial Performance
In Q2 FY26, Can Fin Homes achieved a disbursement of INR2,500 crores, surpassing its guidance. This is a first time the company has crossed this mark in a second quarter. Furthermore, the company crossed INR2,000 crores in Q1 FY26. A strong pipeline is in place.
State-wise performance
Karnataka showed very strong results, with disbursement in September at INR270 crores. In Q2 of the previous year, disbursement was INR78 crores, and the average was about INR275 crores. The state government has announced a couple of real estate friendly initiatives.
The company has reduced the negative growth in Telangana from 30% to 27%. Month-on-month growth in Telangana, like Karnataka, is better than the previous. They anticipate moving into positive territory in Q4.
AUM and Prepayments
AUM growth was slightly lower due to higher prepayments. Additional prepayment of INR200 crores was witnessed, not entirely due to takeovers. Detailed analysis shows an increase of INR120 crores prepayment and loan closures. INR80 crores is because customers paying more than regular EMIs.
Delinquency and Credit Costs
Overall delinquency reduced to approximately INR3,850 crores, a reduction of almost INR130 crores. SMA 0 and SMA 2 have also reduced and NPA saw a marginal reduction. The company expects delinquencies to slightly decrease in Q3, targeting around INR3,750 crores.
Net Interest Margin (NIM)
The spread improved from 2.62% at the end of Q1 to 2.79% at the end of Q2. NIM also crossed 4%. This was driven by achieving the entire 100 basis points benefit in the repo rate cut across all bank borrowings.
NHB has sanctioned a refinance action of INR1,500 crores. The indicative rate informed is approximately 6.8%. NHB has also announced their PLR rate cut of 30 basis points effective July. All our variable rates, approximately around INR3,000 crores of NHB refinance in the regular category is on variable or floating rates. So over the next 2 quarters, this 30 basis points will also be experienced in our books.
IT Transformation
IT transformation is scheduled to go live in Q3. The first part, which is the implementation of some of the modules like our SD-WAN, our mailing solutions, Active Directory, ALM borrowing and treasury modules that was scheduled to go live on 30th of September.
Working towards the second phase, which is a major phase, which is our LOS, LMS, HRMS and our deposits module along with the accounts package, which is scheduled to happen in the Q3.
Guidance
The company is restating guidance for spread in NIMs to around 2.75 and 3.75. Credit costs will be a little less in Q3 similar to Q2. For Q3, they anticipate pushing for INR2,500 crores given IT transformation. Impact of the sales team has been positive.
AUM growth
They will be holding their guidance in terms of 12% to 13% AUM growth and 10,500 overall for the year disbursement.
Source: BSE
