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Better times ahead

Approvals/disbursements pick-up; SENP segment remains the growth driver

Supported by ample liquidity available to the company, positive movement in the home market of Karnataka and improved business traction in new branches, Can Fin’s fresh approvals and disbursements have jumped 17-18% on qoq basis in Q4 FY19. Thus, despite an increase in portfolio run-off (annualized rate 17% v/s 16% in Q3 FY19), the loan book grew by a healthy 5% qoq and 17% yoy. Housing Loans (90% of loan book) portfolio grew by 16% yoy (marking continued deceleration), and within this the self-employed portfolio grew at 2x the rate of salaried home loan portfolio. Self-employed home loans’ share has now risen to 27%, compared to 23% as of Q1 FY18. Management stated that in Karnataka there was a sharp improvement in disbursements and BT rate has moderated.

There was a material expansion in Top-up personal loans and loans for sites in Q4 FY19, but the contribution of these products stands at marginal 5% of Can Fin’s loan assets. Having added significant branches/satellite offices over the past couple of years, and with majority of them coming in the Tier 2/3 growth markets, Can Fin is well capacitated for growth. 

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