Can Fin Homes (CANFINHOME)

FairStock Score: 65/100 — STEADY

Score breakdown: P/E: 3/3 · ROCE: 0/2 · Growth: 2/2 · Dividend: 0/1

Key Financials

Strengths

• ROE of 19.22% with a P/E of 11.53 gives a reasonable earnings yield of about 8.7%.
• Profit growth of 17.03% is nearly double revenue growth of 8.79%, showing operating leverage.
• Piotroski F-Score of 8/9 points to clean financials and low risk of accounting distortion.
• Latest quarterly net profit margin is strong at roughly 24.7% (₹265 Cr on ₹1,073 Cr sales).
• Positive free cash flow of ₹149 Cr and a 1.42% dividend yield provide a small shareholder return.

Concerns

• Negative margin of safety: the stock trades 6.58% above Graham Number of ₹791.33 and well above the DCF value of ₹591.33.
• High leverage with D/E of 6.92, and Altman Z-score of 0.69 underscores balance-sheet sensitivity to credit or interest stress.
• Topline growth is moderate at 8.79%, so the current valuation depends on continued profit efficiency rather than strong volume growth.
• Free cash flow of ₹149 Cr is modest relative to reported earnings, typical of a lender but still a reason to monitor capital allocation.

AI Analysis

Let me evaluate Can Fin Homes as I would any business—by its economics and the cushion the price gives me. The company earns a solid 19.22% return on equity, and its latest quarter shows ₹1,073 Cr of sales and ₹265 Cr of net profit. Profit today is growing at 17.03% while sales are growing only 8.79%, which tells me the operating machine is getting more efficient rather than just chasing volume. A Piotroski score of 8/9 reinforces that impression; this is not a business that needs accounting heroics. As a housing finance company, Can Fin's raw material is borrowed money, and D/E of 6.92 is high. That is normal for the trade, but it also means the business breathes on credit costs and interest rates. The Altman Z-score of 0.69 would frighten me in a factory, though I know financial firms are different. Still, it reminds me why I must demand a margin of safety. At ₹899, I protect myself with an earnings yield of about 8.7% and a dividend yield of 1.42%. That is decent, but not compelling. Graham's valuation method says the stock is worth ₹791.33; my discounted cash-flow estimate is only ₹591.33. I am therefore being asked to pay 6.58% above the Graham number and 52% above my DCF. No margin of safety exists. The 29.99% promoter holding is an anchor of continuity, though I wish it were larger. There is quality here: 19.22% ROE, 8/9 Piotroski, and a sturdy loan portfolio are not common. But quality has a price, and today's market price leaves too little room for judgement errors. I would gladly revisit at Mr. Market's lower quote.

Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer