CANFIN HOMES 2023-24 Annual Report Analysis

Tue, 16 Jul

CANFIN HOMES has announced its results for the year ended March 2024. Let us have a look at the detailed performance review of the company during the year 2023-24.

CANFIN HOMES Income Statement Analysis

• Interest income during the year rose 28.5% on a year-on-year (YoY) basis.
• Interest expenses were up by 31.2% YoY during the same period.
• Operating expenses increased by 57.2% YoY during the year.
• The company's net interest income (NII) increased by 24.1% YoY during the fiscal. Consequently, net interest margins (NIM) witnessed a growth and stood at 3.6% in FY24 as against 3.2% in FY23.
• Other income increased by 16.8% YoY during the year.
• Net profit for the year increased by 20.8% YoY.
• Net profit margins during the year declined to 21.3% in FY24 from 22.7% in FY23.

CANFIN HOMES Income Statement – 2023-24

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*	% Change
Interest Income	Rs m	27,417	35,231	28.5%
Other Income	Rs m	14	16	16.8%
Interest Expense	Rs m	17,015	22,319	31.2%
Net Interest Income	Rs m	10,402	12,911	24.1%
Operating Expense	Rs m	2,051	3,225	57.2%
Pre-provision Operating Profit	Rs m	8,365	9,702	16.0%
Provisions & Contingencies	Rs m	3,816	5,472	43.4%
Profit before tax	Rs m	8,240	9,575	16.2%
Tax	Rs m	2,028	2,068	2.0%
Profit after tax	Rs m	6,212	7,507	20.8%
Minority Interest	Rs m	0	0	0.0%
Net Interest Margin	%	3.2	3.6
Net profit margin	%	22.7	21.3

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CANFIN HOMES Balance Sheet Analysis

• The company's deposits during FY24 stood at Rs 2.2 bn as compared to Rs 4.4 bn in FY23, thereby witnessing a decrease of 49.9%.
• Advances for the year stood at Rs 345.5 bn as compared to Rs 311.9 bn during FY23, a rise of 10.8%.
• Cost of deposits for CANFIN HOMES rose 43.0% and stood at 10.6%, while yield on advances rose to 0.0%.
• The lender's investments rose to Rs 14.6 bn during the year from Rs 14.6 bn in FY23.
• Borrowing stood at Rs 75.1 bn, a growth of 15.2% as compared to previous year.
• Overall, the total assets and liabilities for FY24 stood at Rs 365.4 bn as against Rs 330.2 bn during FY23, thereby witnessing a rise of 10.6%.

CANFIN HOMES Balance Sheet – as on March 2024

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*	% Change
Networth	Rs m	36,473	43,439	19.1%
Advances	Rs m	311,933	345,531	10.8%
Deposits	Rs m	4,350	2,178	-49.9%
Yield on advances	%	0.0	0.0
Cost of Deposits	%	7.4	10.6
Investments	Rs m	14,623	14,626	0.0%
Borrowings	Rs m	65,225	75,110	15.2%
Total Assets	Rs m	330,221	365,357	10.6%

Current Valuations for CANFIN HOMES

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 56.4, an improvement from the EPS of Rs 46.7 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 889.0, stands at 12.7 times its trailing twelve months earnings.
• The price to adjusted book value (P/ABV) ratio at current price levels stands at 2.7 times, while the price to income ratio stands at 2.7 times.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*
Income per share (Unadj.)	Rs	205.9	264.6
Earnings per share (Unadj.)	Rs	46.7	56.4
Diluted earnings per share	Rs	46.7	56.4
Avg P/E ratio	Rs	11.7	12.7
Avg P/ABV ratio	Rs	2.9	2.7
Avg Market Cap	Rs	72,769	95,471
Dividends per share (Unadj.)	Rs	3.50	6.00

Ratio Analysis for CANFIN HOMES

• Efficiency Ratios

  Credit/Deposit Ratio: The company's credit/deposit ratio improved and stood at 15,863.5x during FY24, from 7,170.8x during FY23. The credit/deposit ratio tells us how much money a company has raised in the form of deposits and has deployed as loans.

  Debt to Equity Ratio: The company's debt to equity ratio decreased and stood at 1.78x during FY24, from 1.91x during FY23. The debt to equity ratio of a company tells us how much debt a company uses relative to its equity.

• Liquidity Ratios

  Capital Adequacy Ratio (CAR): CANFIN HOMES's capital adequacy ratio (CAR) was at 0.0% as on 31 March 2024 as compared to 23.1% a year ago. This ratio helps measure the financial strength of the company or any finance company to meet their obligations using their assets and capital.

  A company that has a good CAR has enough capital to absorb potential losses. Thus, it has less risk of becoming insolvent and losing depositor's money.

  Provision Coverage Ratio (PCR): Apart from CAR, you also need to take a look at the company's PCR and LCR ratios. Provisioning coverage ratio (PCR) is the percentage of funds that a company sets aside for covering losses due to bad debts.

  So a high PCR ratio means asset quality issues are under control and the company is not vulnerable.

  Liquidity Coverage Ratio (LCR): The LCR is designed to ensure that companies hold a sufficient reserve of high-quality liquid assets to allow them to survive a period of significant liquidity stress lasting 30 calendar days.

• Profitability Ratios

  Return on Equity (ROE): The return on equity (ROE) ratio for the company improved and stood at 17.3% during FY24, from 17.0% during FY23. The ROE measures the ability of a firm to generate profits from its shareholders capital in the company.

  Return on Assets (ROA): The return on asset (ROA) ratio of the company improved and stood at 2.05% during FY24, from 1.88% during FY23. The ROA measures how efficiently the company uses its assets to generate earnings.

  Return on Capital Employed (ROCE): The ROCE for the company improved and stood at 9.26% during FY24, from 8.36% during FY23. The ROCE measures the ability of a company to generate profits from its total capital (shareholder capital plus debt capital) employed in the company.

• NPA Ratios

  Gross NPA Ratio: The gross NPA ratio is the ratio of a company's gross NPAs to gross advances. CANFIN HOMES's gross NPA ratio stood at 0.0% as of 31 March 2024 compared to 0.6% in the same period a year ago.

  A high gross NPA ratio is a bad thing as it indicates how much of a company's loans are in danger of not being repaid.

  Net NPA Ratio: In simple language, net NPAs are simply the total non-performing assets minus the provision left aside. It gives you the exact value of NPAs after the company has made provisions.

  The net NPA ratio of CANFIN HOMES was 0.0% in financial year 2024. This compared with 0.3% a year ago.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*
Credit/Deposit Ratio	x	7,170.8	15,863.5
Debt to Equity Ratio	x	1.9	1.8
Loans / Deposits	x	0.0	0.0
Capital Adequacy Ratio	%	23.1	0.0
Return on Equity	%	17.0	17.3
Return on Assets	%	1.9	2.1
Return on Capital Employed	%	8.4	9.3
% of Gross NPAs	%	0.6	0.0
% of Net NPAs	%	0.3	0.0
Yield on Advances	x	0.0	0.0
Yield on Investments	x	0.0	0.0

To see how CANFIN HOMES has performed over the last 5 years, please visit here.

CANFIN HOMES Share Price Performance

Over the last one year, CANFIN HOMES share price has moved up from Rs 802.6 to Rs 889.0, registering a gain of Rs 86.4 or around 10.8%.

Overall, the S&P BSE SENSEX is up 23.5% over the year.

(To know more, you can check out historical annual results for CANFIN HOMES here and quarterly results for CANFIN HOMES here)