Prabhudas Lilladher has maintained its accumulate rating on Can Fin Homes with a target price of ₹1,015.00, citing improved operational performance and positive regional momentum despite some operational challenges.

Quarterly Performance and Growth Outlook

The housing finance company demonstrated improved disbursement activity during Q3, with particularly strong performance in Karnataka and Telangana markets showing positive run-rates. The loan book registered growth of 10.00% year-on-year in Q3, forming the foundation for the brokerage's growth projections.

Margin and Cost Structure Analysis

Net interest margins are expected to trend in line with management guidance at 3.75% for both FY26 and FY27, supported by anticipated lower cost of borrowing. This margin stability represents a key positive factor in the brokerage's revised estimates.

However, the cost-to-income ratio is projected to remain elevated at approximately 18.00% over the FY26-28 period. This elevation stems from ongoing investments in business transformation initiatives and expansion activities, which are expected to weigh on near-term profitability metrics.

Valuation and Investment Rationale

Prabhudas Lilladher has revised its FY26 and FY27 estimates upwards, incorporating the positive margin trajectory observed in recent performance. The target price of ₹1,015.00 is derived using a valuation multiple of 2.0x December 2027 estimated price-to-adjusted book value.

The brokerage acknowledges that while the company shows promise with improved disbursements and stable margin guidance, lower growth expectations and elevated operational expenses continue to impact overall earnings potential. Despite these challenges, the accumulate rating reflects confidence in the company's long-term prospects and regional market positioning.

Can Fin Homes has announced a comprehensive sales team expansion strategy during its recent conference call, outlining plans to significantly strengthen its direct sales capabilities over the next few years. The housing finance company has set ambitious targets for workforce growth as part of its strategic diversification initiative.

Sales Team Expansion Strategy

The company has established a clear roadmap for scaling its sales operations, with specific targets outlined for the coming years. The expansion plan demonstrates the company's commitment to building stronger direct customer relationships and reducing dependency on external channels.

Strategic Objectives and Benefits

The expansion initiative serves multiple strategic purposes for Can Fin Homes. By building a larger internal sales force, the company aims to diversify its sourcing mix and reduce its current reliance on Direct Selling Agents (DSAs). This shift toward direct sales capabilities could potentially provide the company with:

• Enhanced control over customer acquisition processes
• Improved customer relationship management
• Better margin control through reduced external commissions
• Strengthened brand presence in target markets

Implementation Timeline

The phased approach to team expansion indicates a structured implementation strategy. With 150 new sales personnel targeted for addition in the next financial year, the company is taking a significant step toward achieving its FY28 goal of 250 team members. This represents a substantial investment in human resources and reflects the company's confidence in market opportunities and growth prospects.

The strategic focus on reducing DSA dependency while building internal capabilities suggests Can Fin Homes is positioning itself for more sustainable and controlled growth in the competitive housing finance sector.