PL First Cut – Canfin Q2FY24

PL First Cut – Canfin Q2FY24 – Gaurav Jani – Research Analyst, Prabhudas Lilladher Pvt Ltd

Canfin Q2FY24 – Mixed quarter; earnings beat led by higher NII/NIM but miss on growth and asset quality

◼️NII was a beat at Rs3.17bn (PLe Rs2.98bn) as NIM (calc.) surprised positively at 4.1% (PLe 3.8%)

◼️Better NIM was a function of lower CoF at 7.73% (PLe 7.95%) as yields at 11.1% were in-line

◼️Reported NIM was 3.80% compared to 3.48% in Q1’24 and 3.55% a year ago

◼️Loan growth came in lower at 15.7% YoY (PLe 16.8%) to Rs333.6bn

◼️Disbursals were a miss at lower Rs20.2bn (PLe Rs23.2bn) while repayments at Rs11.65bn came in largely as expected

◼️Other income was a slight miss at Rs58mn due to lower fees which was offset by lesser opex at Rs524mn (PLe Rs545mn)

◼️PPoP at Rs2.7bn was 8.2% higher to PLe led by higher NII

◼️Asset quality deteriorated as GNPA/NNPA rose by 13/11bps each QoQ to 0.76%/0.43% while PCR dipped QoQ from 46.6% from 43.4%

◼️Provisions were higher Rs722mn (PLe Rs585mn) which included impact of Ambala branch fraud

◼️Provisions split of Rs722mn was: fraud Rs396.7mn, NPA Provision Rs164.3mn, mgmt. overlay Rs173mn and std. prov. write-back Rs12.1mn

◼️PAT was a beat at Rs1.58bn (PLe Rs1.47bn)

◼️At CMP, the stock trades at 2.1/1.7x on Mar’25/26E ABV.