Can Fin Homes Ltd: Q2 FY26 - Building on a Strong Foundation

Can Fin Homes Ltd. has delivered a robust performance in the second quarter of Fiscal Year 2026, showcasing resilience and strategic execution. The company reported a Net Interest Income (NII) of INR 404 crore, a Profit Before Tax (PBT) of INR 332 crore, and a Profit After Tax (PAT) of INR 251 crore. These figures represent a significant year-on-year growth, with NII up 16%, PBT up 15%, and PAT up 16% compared to Q2 FY25. The loan book expanded to INR 39,657 crore, an 8% increase year-on-year, serving a clientele base of 2.84 lakh. The company's Net Interest Margin (NIM) improved to 4.02%, and Return on Average Assets (RoAA) stood at 2.46%, reflecting enhanced profitability.

Strategic Execution and Operational Highlights

Management highlighted the achievement of their Q2 disbursement guidance, reaching INR 2,545 crore. This marks the first time the company has crossed the INR 2,500 crore disbursement threshold in a second quarter, demonstrating strong operational momentum. Regional performance, particularly in Karnataka, has seen a significant turnaround, with monthly disbursements touching INR 270 crore in September, up from INR 78 crore in the previous year. This recovery is bolstered by recent government announcements regarding property conversions, which are expected to further stimulate business in the state. While Telangana continues to be a focus area, the negative growth has been reduced, with expectations to turn positive by Q4 FY26.

Can Fin Homes also reported a notable improvement in asset quality. Gross NPA stood at 0.94% and Net NPA at 0.48%, with an overall delinquency reduction of approximately INR 130 crore. This improvement was broad-based, with reductions across SMA 0, SMA 2, and NPA categories. The company's credit cost for the year is anticipated to be lower than the guided 15 basis points, underscoring effective risk management and a healthier loan portfolio.

Below is a financial summary of Can Fin Homes Ltd.'s performance for Q2 FY26:

Digital Transformation and Future Outlook

A significant strategic pillar for Can Fin Homes is its ongoing IT transformation project, which is progressing as per schedule with an expected implementation by Q3 FY26. This initiative aims to enhance operational efficiency, improve customer service, and strengthen digital capabilities. The first phase, including SD-WAN and ALM modules, has already gone live, with the second phase covering LOS, LMS, and HRMS slated for Q3. While this transformation may lead to a temporary moderation in Q3 disbursements due to staff training and system transitions, management views it as a crucial investment for long-term productivity gains and a competitive edge.

The company is also focused on expanding its geographical footprint and strengthening its sales force. It has opened 29 new branches in the last 6-9 months and increased its sales team, which has significantly boosted direct sourcing. This multi-pronged approach aims to diversify revenue streams and reduce reliance on external channels. Management has guided for an AUM growth of 12-13% for FY26, with an ambitious target of 15% for FY27 and FY28, reflecting confidence in their growth strategy.

Sustainability and Governance

Can Fin Homes is actively integrating Environmental, Social, and Governance (ESG) principles into its operations. Initiatives include a Rooftop Solar Loan Scheme, transitioning offices to LED lighting and solar-backed UPS systems, minimizing single-use plastic, and implementing rainwater harvesting. The company also emphasizes cyber security, data privacy, and employee welfare, including comprehensive training programs and gender diversity initiatives. Transparent communication is maintained through regular investor calls and public disclosure of transcripts, reinforcing trust among stakeholders.

Can Fin Homes Ltd. is clearly focused on sustained growth and operational excellence. The company's disciplined execution, strategic investments in technology and network expansion, and commitment to ESG principles position it well for future success. The management's proactive approach to addressing challenges while maintaining a clear vision for expansion and profitability underscores a confident outlook for the coming quarters.