Can Fin Homes targets ₹3,300cr Q4 disbursals in FY26

Q4 rebound expected after a softer patch

Can Fin Homes is preparing for a stronger March quarter (4QFY26) after a temporary moderation linked to its ongoing IT transformation. The company expects business momentum to pick up sharply as disbursements stabilise across geographies. Management commentary indicates Q4 should turn “positive” on volumes, helped by improved operating conditions in key markets. The company has also indicated that the full impact of repo rate cuts has already flowed through its bank borrowings. In the near term, it does not intend to pass on rate reductions to customers in the current quarter. However, it may consider a 10-basis-point cut if the central bank eases further.

Q4 disbursement guidance: ₹3,200-3,300 crore

For 4QFY26, Can Fin Homes is expecting disbursements of about ₹3,200-3,300 crore. The company said this pickup should help it move closer to about 12% AUM growth. It also noted that the growth run-rate has improved materially, including a 45% growth compared to Q3 of last year. Management indicated that stabilisation across geographies is supporting the higher Q4 expectation. The company also reiterated that the distribution trend typically has about 45% of business in the first half and about 55% in the second half. That seasonality aligns with stronger second-half disbursement performance.

What changed on the ground in key states

According to a note cited from Motilal Oswal Financial Services (MOFSL), Q3 disbursements saw a pickup with a positive run-rate in Karnataka and Telangana. Earlier operational frictions, including registration-related issues in Karnataka (E-Khata) and normalisation in Telangana, were referenced as factors behind the improvement in activity. As these processes eased, the company’s disbursement momentum strengthened. In Q3, the loan book grew 10.2% year-on-year and 3.2% quarter-on-quarter to ₹40,950 crore (₹409.5 billion). Management expects to “pick up the slack” in Q4 and stay on track with its FY26 disbursement target.

Prepayments are affecting AUM growth optics

While disbursements have broadly tracked guidance, management flagged higher prepayments and loan closures as a headwind for AUM growth. It said prepayments or “loan closures” have been about ₹200-250 crore for the last couple of quarters, marking an increase compared with earlier periods. Separately, another note referenced higher prepayments of around ₹400 crore (₹4 billion) impacting Q3 AUM growth. The company’s message is that net growth is being influenced not only by fresh disbursements but also by elevated run-offs. Even with that, it expects Q4 disbursements to help inch AUM growth closer to 12%.

Margin outlook: NIM target stays at 3.75%

Can Fin Homes has communicated confidence around its net interest margin (NIM) target of 3.75%. The company has said it has already realised the full impact of repo rate cuts across its bank borrowings. This reduces the urgency to pass on rate cuts immediately to customers in the current quarter. At the same time, it kept the door open to a modest pricing action, indicating it may consider a 10-basis-point cut if the RBI reduces rates further. This stance suggests the company is balancing competitiveness with margin protection.

Credit costs seen benign; FY26 could slip below 10 bps

Management indicated that credit cost could slip below 10 basis points for FY26. MOFSL’s note also pointed to benign credit costs as a driver of profitability in recent quarters. For 2QFY26, Can Fin Homes reported a 19% year-on-year rise in profit after tax to ₹250 crore (₹2.5 billion), supported by a 19% increase in net interest income. During the same quarter, reported NIM expanded by about 20 basis points sequentially to 3.83%, aided by a 20-basis-point decline in the cost of borrowings to 7.3%. These numbers provide context for the company’s confidence on margins and credit costs.

FY26 growth targets and the FY27 ramp-up plan

The company has reiterated a full-year disbursement target of ₹10,500 crore (₹105 billion) for FY26. It has guided for loan growth of 12-13% in FY26, with growth rising to around 15% from FY27 onwards, as cited by MOFSL. Another note also mentioned expectations of 11% loan growth in FY26 and 14% in FY27E, reflecting different forecast assumptions based on first-half trends. Management has also indicated a plan to open around 25 new branches over the next year. A separate projection referenced a disbursement run-rate of around ₹13,500 crore (₹135 billion) alongside ~15% loan growth in FY27.

Portfolio mix and liquidity: September 2025 snapshot

As of September 2025, the loan portfolio stood at ₹39,657 crore, up from ₹36,591 crore in the corresponding previous-year quarter, an increase of 8%. Housing loans constituted 74% of the loan book, while non-housing loans (including CRE) made up 26%. For the half year ended September 30, 2025, disbursements were ₹4,560 crore versus ₹4,233 crore in the corresponding previous period, a 7% year-on-year increase. The liquidity buffer remained strong, with the Liquidity Coverage Ratio at 217.2% as of September 30, 2025, compared with the stipulated requirement of 85%.

Broker view: estimates raised, rating remains Neutral

MOFSL has raised its FY26 earnings estimate for Can Fin Homes by around 5%, factoring in higher margins and lower credit costs. It projects an 13% CAGR in both advances and PAT between FY25 and FY28. The brokerage expects RoA and RoE to stabilise at around 2.2% and 17%, respectively, by FY28. It maintains a Neutral rating with a target price of ₹915, based on 1.7 times Sep’27 estimated book value. These projections frame the market’s current expectation set around growth and profitability.

Key numbers at a glance

Market impact and what investors will track

For investors, the near-term focus is on whether Q4 disbursements land within the ₹3,200-3,300 crore range and translate into the targeted AUM growth trajectory. Prepayment trends are another variable, given management’s comments that elevated run-offs have affected AUM growth despite healthy disbursement volumes. On margins, the company’s decision not to pass on rate cuts immediately, while still considering a 10-basis-point cut in the event of further RBI easing, will be watched for its impact on NIM. Credit cost guidance of potentially below 10 bps in FY26 also remains a key operating metric, especially as the sector balances growth with underwriting discipline.

Conclusion

Can Fin Homes is positioning for a stronger 4QFY26, supported by stabilised execution across geographies and a disbursement outlook of ₹3,200-3,300 crore. Management has reiterated its FY26 disbursement target of ₹10,500 crore and remains confident of a 3.75% NIM target, with credit costs potentially below 10 bps. The next set of updates investors will track include the actual Q4 disbursement print, the pace of prepayments, and any change in lending rates if the RBI cuts further.