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News: Canfin Homes reported has reported mixed performance in Q3FY24. Moderation in business growth continued, NPA witnessed increase owing to restructured book, though operational performance remained healthy. Restructuring of processes led to continued slowdown in AUM growth at 13.1% YoY to ₹34053 crore. GNPA increased ~15 bps QoQ to 0.91%; slippage from restructured pool accounted for ~9 bps rise in GNPA. NII growth came at 31% YoY, led by improvement in margins at 3.92%. Opex remained steady at ~60-70 bps of AUM, while provisions remained a tad higher at 38 bps. Healthy NII and lower tax led PAT growth at 32% YoY to ₹200.1 crore.
Views: Slower growth came against management’s guidance of reversal in 2HFY24. Exit of restructured book led to rise in GNPA, however, provision coverage at ~76% (including overlay and restructured provision) provides comfort. Reversal in business growth momentum remains watchful as catalyst for driving valuation.
Impact: Neutral