Mazagon Dock 20X Returns – What’s next?

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Clients of Futurecaps gained 20X returns from Mazagon Dock & 12X from Cochin Shipyard.

New Multibagger – Can Fin Homes

Can Fin Home is a public deposit-taking housing finance company. It focuses on funding to low & middle group individuals & first-time homebuyers preferably salaried professionals & expand its services to builders, corporates, and others in India.

The company products portfolio comprises housing loans, such as individual housing loans, affordable housing loans, credit link subsidy scheme and Pradhan Mantri Awas Yojana (PMAY). It also serves businesses through composite loans, and top-up loans; and non-housing loans, including mortgage loans, site loans, loans for commercial properties, loans against rent receivables.

For individuals it extends its service array through personal loans, loans for children education, and loans for pensioners, as well as fixed and cumulative deposits.

The company has 3 major segments: Housing finance, Non-housing Finance & Deposits. The average ticket size is 18 lacs for housing loans & 9 lacs for non-housing loans. It also accepts – Fixed & Cumulative deposits as per the rules of the National Housing Bank. Shri Suresh S Iyer is the current Managing Director & CEO.

Headquartered in Bengaluru with 6 Zones & Can Fin have Pan India presence with 205 branches, 21 Affordable Housing Loan Centers & 12 satellite offices + 219 outlets in total over 100 cities spread across 21 states & Union territories.

Products & Services

Housing finance
Non-housing Finance
Deposits

POSITIVES

Can Fin Homes Ltd. has 205 branches spread over 21 States and Union Territories catering to the different needs of the borrowers across geographies.
The Company plans to expand its branch network and make inroads into new, potential geographies to extend housing finance to a diverse segment of home aspirants.
Earnings have grown by 17.1% per year over the past 5 years.
Intrinsic Value of the stock is above 30%
Average cost of borrowings remains at 6.5%, and consistently delivering steady spreads over the past five years.
Loan book crossed 30000 Crores which depicts growth in business.
The share of loans extended to self employed stood at 27% of the loan book, totalling H8477 crore.
The company is good value based on its Price-To-Earnings Ratio (15X) compared to the peer average (24x).
The Company has good value based on its Price-To-Earnings Ratio (15.8x) compared to the Indian Diversified Financial industry average (28.9x).
Revenue (14.7% per year) is forecast to grow faster than the Indian market (9.6% per year). Earnings vs Savings Rate: Company forecast earnings growth (13.6% per year) is above the savings rate.

NEGATIVES

Housing finance companies (HFCs) face significant competition from banks and large housing finance companies in Tier I and Tier II cities.
Credit Risk is an intrinsic part of any lending activity and arises on account of payment default of instalments by the borrowers.
Risks which depend on external factors such as inflation, deflation, demand, supply dynamics are beyond the control of the Company. The adverse market conditions give scope for liquidity risk, interest rate risk, funding risk etc.

Warren Buffett Checklist


ECONOMIC MOAT	Moderate
GROWTH	Good
VALUATION	Good
DEBT	High
INTEGRITY	Moderate

Summary

The company has the potential to become multibagger in the order of 300-500% in 5-10 year term. Full Details visit the article here.

About Futurecaps

Futurecaps is SEBI Registered Research Analyst INH200006956 serving Indian Investors since 2012. We follow Value Investing principles of Warren Buffett and created 50+ multibaggers in the past. We keep the prices low so that the Growing Investor can afford our services.

Performance

You can see our past performance here