Morgan Stanley has updated its risk-reward assessment on Can Fin Homes , rolling forward its valuation framework by six months to March 2027. The revision has led to an approximate 6% increase in the bank's scenario values and price target, even as earnings estimates remain unchanged. The brokerage continues to view Can Fin Homes as a defensive, secured lending play, backed by moderate growth prospects and a mid-teens return on equity profile, trading at less than 2x price-to-book.

Overweight Rating Maintained

Morgan Stanley has reiterated its 'overweight' rating on the stock, with a base-case price target of ₹1,060. The brokerage notes that while disbursements have picked up, overall loan growth remains muted. However, management has retained its guidance of 12–13% loan growth for FY26, supported by expected disbursements of ₹10,500 crore in FY26, compared with ₹9,850 crore estimated by Morgan Stanley.

Growth Outlook and Valuation Metrics

The brokerage believes that a sustained pickup in loan growth will be critical for improving investor interest in the stock. Despite the subdued growth environment, Morgan Stanley finds the valuation attractive. Can Fin Homes is currently valued at 1.8x FY27 estimated book value and around 12x FY27 estimated earnings, which the brokerage views as reasonable given its expectation of 16% ROE in FY28 and around 10% EPS growth in FY28.

According to the brokerage, Can Fin Homes offers a compelling combination of a fully secured, high-quality retail mortgage portfolio, sustainable growth, and healthy ROE, supported by a headline valuation that looks attractive relative to peers.

Scenario Analysis: Bull, Base and Bear Cases

Morgan Stanley has outlined three distinct scenarios for Can Fin Homes' valuation based on different market conditions and performance parameters.

Bull Case Scenario

In its bull case, Morgan Stanley values Can Fin Homes at ₹1,420. This scenario assumes a strong housing credit market, higher-than-expected loan growth, and margin improvement, driven by lower borrowing costs and reduced competitive intensity. Improved economies of scale are expected to lower operating costs, while benign asset quality keeps provisioning requirements low.

Base Case Projections

The base case valuation of ₹1,060 expects FY25–28 AUM CAGR of around 11%, with net interest income to average loans at 3.90% between FY26 and FY28, compared with 3.76% in FY25. Operating costs are projected to average 74 basis points of average assets under management during FY26–28, versus 65 basis points in FY25, while credit costs are expected to average 14 basis points, down from 21 basis points in FY25.

Bear Case Assessment

In the bear case, the stock is valued at ₹735, or 1.3x March 2028 estimated book value. This scenario factors in weak housing credit demand, resulting in lower AUM growth, higher operating costs, and deterioration in asset quality. Credit costs in this case are expected to be higher than in the base scenario.

Can Fin Homes Limited has successfully completed its interim dividend payment process and announced key management reappointment following significant corporate developments. The company declared an interim dividend for Financial Year 2025-26 during its Board of Directors meeting held on December 15, 2025, and has now completed the payment to eligible shareholders.

Interim Dividend Declaration and Payment

The Board of Directors declared and successfully disbursed an interim dividend for Financial Year 2025-26, demonstrating the company's strong financial position and commitment to shareholder returns.

The interim dividend of ₹7.00 per equity share has been successfully credited to the bank accounts of shareholders who had submitted their bank account particulars to the company, depository participants, or the registrar and transfer agents. The payment was completed on December 29, 2025, well within the regulatory timeline of 30 days from the declaration date.

Tax Compliance and Payment Process

The company ensured full regulatory compliance during the dividend payment process, adhering to updated tax regulations and electronic payment mandates.

Shareholders were required to submit tax exemption forms and supporting documents through the designated online portal before December 22, 2025. The company deducted TDS at prescribed rates based on shareholders' residential status and submitted documentation, ensuring compliance with the Finance Act 2020 amendments.

Management Reappointment

The Board approved the re-appointment of Shri Suresh Srinivasan Iyer as Managing Director & CEO for an additional two-year term, based on recommendations from the Nomination Remuneration and HR Committee.

The reappointment is subject to prior approval from the Reserve Bank of India under Para 45.3 of NBFC-HFC (Reserve Bank) Directions, 2021. Following RBI approval, shareholder approval will be sought within the prescribed period.

Leadership Profile and Experience

Shri Suresh Srinivasan Iyer brings over 25 years of experience in the housing finance sector to his continued leadership role.

The company confirmed that Shri Suresh Srinivasan Iyer is not related to any Directors or Key Managerial Personnel, ensuring independence in governance structure. He is not debarred from holding office by SEBI or any other regulatory authority.

Regulatory Compliance and Communication

Both the dividend payment completion and management reappointment announcements comply with SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, specifically Regulation 30. The company has maintained transparency by uploading all documentation on its website and ensuring proper communication to stock exchanges regarding these corporate developments.