CanFin Homes

Absolute :REDUCE
Relative : Benchmark
2QFY18 Result: Estimates (), Target (), Rating () Regular Coverage 2.9% ATR in 11 months

Fresh approvals slow down; retain REDUCE BFSI

© 2017EquirusAll rights reserved
Rating Information
CanFin Homes’ (CANF) 2QFY18 PAT of Rs 750mn (+36.2% yoy) came in marginally ahead
Revised Estimates % Change
of our estimates of Rs 730mn. NII growth was healthy at 26.7% yoy with stable NIMs of
Price (Rs) 539 FY18E FY19E FY18E FY19E
3.64%. However, growth in approvals/disbursements was tepid at 3.8%/3.7% yoy owing
Target Price (Rs) 554
to the combined impact of demonetization, RERA and GST on the real estate sector. NII 5,246 6,212 -1.5% -2.0%
Target Date Sept ‘18
We remain watchful of possible pressures on NIM, a slowdown in disbursements and a Provisions 270 349 3.7% -0.2%
Target Set On Oct ‘17
likely uptick in credit costs given a steadily rising share of self-employed segment PAT 3,031 3,547 -1.2% -2.1%
Implied yrs of growth (ERE) 20
loans. We expect FY18 loan growth of ~21%, lower than CANF guidance of ~28%, owing
Fair Value (ERE) 554 EPS 23 27 -1.0% -2.0%
to elevated repayments (~19% of avg. loans) and slowdown in fresh disbursements as
Fair Value (DDM) NA Advances 161,661 200,261 -0.3% -0.3%
supply in affordable housing remains a constraint. We retain REDUCE and maintain our
Ind Benchmark BANKEX
Sep’18 TP of Rs 554 set at a 5x/4.1x Sep’18/ Sep’19 ABV of Rs 110/Rs 136. Deposits 143,783 178,954 -0.5% -0.5%
Model Portfolio Position -
Loan book up 21% yoy, approval growth muted at 3.8% yoy: CANF’s loan book/ Standalone Financials
Stock Information disbursements/approvals grew 21%/3.7%/3.8% yoy. While annual growth was muted, Rs. Mn YE Mar FY17A FY18E FY19E FY20E
Market Cap (Rs Mn) 71,728 sequential growth in disbursements/approvals was healthy at 17%/33% qoq. The share of NII 4,221 5,246 6,212 7,531
Free Float (%) 69.30 % salaried & professionals in O/S loans declined further to 73.9% (1QFY18: 74.6%). The Other Income 470 584 739 887
52 Wk H/L (Rs) 666.6/250.4 share of housing loans remained high at 89%; about 91%/40% of fresh home loan Total Income 4,691 5,829 6,951 8,418
Avg Daily Volume (Mn 1yr) 590,429 approvals were to individuals with income below Rs 1.8mn/Rs 0.6mn. The trend in rolling Operating Cost 807 855 1,060 1,272
Avg Daily Value (1yr Rsmn) 279 12m approvals/avg. loans declined to 41.6% vs 48.4% in 2QFY17. We thus build in PPoP 3,884 4,974 5,892 7,146
Equity Cap (Rs Mn) 266 FY18E/FY19E loan book growth of ~22%/24% vs. management guidance of ~28% for FY18. Provisions 182 270 349 441
Face Value (Rs) 2 Stable NIMs lead to healthy 27% yoy NII growth: NII increased by 27% yoy with stable PAT 2,353 3,031 3,547 4,292
Bloomberg Code CANF IN NIMs at 3.64% as an 8bps qoq decline in the yield on assets was offset by a similar Loan and Advance 133,130 161,661 200,261 240,313
Ownership Recent 3M 12M % decline in the cost of borrowings. Interest spreads stood at 2.74% vs. 2.75% in 1QFY18. Borrowings 118,720 143,783 178,954 214,744
Promoters 30.7 % 0.1 % -12.8 % The borrowing mix continues to shift in favour of market borrowings which now Investments 161 0 0 0
DII 2.3 % 0.8 % 1.9 % constitute ~59% of total borrowings vs. 52% in 1QFY18. CANF has started CIBIL and NIM 3.5 % 3.6 % 3.4 % 3.4 %
FII 0.1 % -0.1 % -0.2 % repayment track record-based annual risk rating of borrowers, based on which Prov/ AvgAdv 0.14 % 0.22 % 0.22 % 0.22 %
Public 66.9 % -0.7 % 11.1 % borrower interest rates would be reset annually and could have a negative impact on Rs Per Share FY17A FY18E FY19E FY20E
spreads. The C/I ratio improved to 14.3% (1QFY18: 14.9%) on contained 3.2% yoy opex EPS 17.7 22.8 26.6 32.2
Price % 1M% 3M% 12M%
growth; we expect similar trends ahead and build in a C/I ratio of ~14.7% for FY18E. Adjusted EPS 17.7 22.8 26.6 32.2
Absolute 1.4 % -11.9 % 45.8 %
Asset quality deteriorates marginally: GNPL/NNPL ratio inched up marginally to Book Value 80.9 98.3 121.6 150.0
Vs Industry 2.6 % -9.8 % 26.8 %
GICHSGFIN -4.7 % -7.8 % 45.3 %
0.4%/0.18%. CANF set aside Rs 80mn towards NPA provisions during the quarter. While Adjusted BVPS 80.9 98.3 121.6 150.0

REPCOHOME 5.0 % -16.9 % -17.0 %

the share of LAP and builder loans has been contained at 6%, CANF is incrementally DPS 2.0 2.4 2.8 3.2
focusing on home loans to the self-employed segment which could lead to a marginal P/E (x) 30.5 23.7 20.2 16.7
Standalone Quarterly EPS forecast
uptick in credit costs going ahead. Adj P/B (x) 6.7 5.5 4.4 3.6
Rs/Share 1Q 2Q 3Q 4Q
EPS (17A) 3.7 4.1 4.5 5.3 Key risks: Margin pressure due to competition from banks and a slowdown in fresh Adj ROE (%) 24.1 % 25.4 % 24.2 % 23.7 %

EPS (18E) 5.4 5.6 5.8 6.0 sanctions/disbursements remain key risks. RoA (%) 1.9 % 2.0 % 1.9 % 1.9 %

October 25, 2017 Analyst: Rohan Mandora rohan.mandora@equirus.com (+91-9737065666) / Ankit Choudhary ankit.choudhary@equirus.com Page 1 of 13
Before reading this report, you must refer to the disclaimer on the last page.
 Canfin Homes Absolute – REDUCE Relative – Benchmark 2.9% ATR in 11 Months

Quarterly performance
Particulars %Variation
(Rs. mn) 2QFY18 2QFY18E 2QFY17 1QFY18 2QFY18E 2QFY17 1QFY18
Net interest income (NII) 1,280 1,269 1,010 1,234 0.8% 26.7% 3.7%
Other income 146 156 121 122 -6.5% 20.9% 19.5%
Total income 1,426 1,426 1,131 1,356 0.0% 26.1% 5.2%
Operating expenses 204 215 198 203 -5.1% 3.2% 0.9%
Staff expenses 102 110 100 103 -7.7% 2.3% -1.2%
Other expenses 102 105 98 99 -2.4% 4.2% 3.0%
Operating profit 1,222 1,210 933 1,153 0.9% 31.0% 5.9%
Total provisions 80 69 60 42 15.3% 32.7% 91.8%
Profit before tax 1,142 1,141 873 1,112 0.1% 30.8% 2.7%
Tax 392 411 322 400 -4.6% 21.7% -1.9%
Profit after tax 750 730 551 712 2.7% 36.2% 5.3%
Balance sheet (Rs mn) 2QFY18 2QFY18E 2QFY17 1QFY18 % change vs Est % change y-y % change q-q
Advances 144,560 144,984 119,800 138,080 -0.3% 20.7% 4.7%
Gross NPL (Rs mn) 580 298 523 94.3% 10.9%
Net NPL (Rs mn) 259 36 234 624.0% -

Ratios (%) 2QFY18 2QFY18E 2QFY17 1QFY18 bp change y-y bp change q-q
Profitability ratios
Yield on Advances – Cal 10.44% 11.0% 10.5% -58 -6
Cost of Borrowing 7.76% 8.6% 7.8% -79 -8
NIM – Cal 3.6% 3.5% 3.6% 14 -1
RoaA 2.1% 1.9% 2.1% 24 4
RoaE 24.6% 21.7% 25.5% 282 -99
Asset Quality
Gross NPL ratio 0.40% 0.25% 0.38% 15 2
Net NPL ratio 0.18% 0.0% 0.2% 15 1
Coverage ratio (reported) 55.3% 88.0% 55.3% -3,271 2
Business & Other Ratios
Cost-income ratio - Calc 14.3% 17.5% 14.9% -317 -61
Non int. inc / total income 10.2% 10.7% 9.0% -44 123
CAR 18.8% 18.9% 19.2% -8 -38
Source: Company, Equirus Securities

October 25, 2017 Analyst: Rohan Mandora rohan.mandora@equirus.com (+91-9737065666)/ / Ankit Choudhary ankit.choudhary@equirus.com Page2 of 13
 Canfin Homes Absolute – REDUCE Relative – Benchmark 2.9% ATR in 11 Months

Exhibit 1: Advances growth continues to grow at 21% yoy as supply side issues
persist in the affordable housing segment Exhibit 3: GNPL/NNPL ratio stood at 0.40%/0.18%
(Rs 000') Advances YoY Growth GNPA NNPA Provision Coverage
140 50% 0.49% 125%

0.42%
110 40% 100%
0.35%
80 30% 0.28% 75%

0.21% 50%
50 20%
0.14%
20 10% 25%
0.07%

0.00% 0%
-10 0%
1QFY15

2QFY15

3QFY15

4QFY15

1QFY16

2QFY16

3QFY16

4QFY16

1QFY17

2QFY17

3QFY17

4QFY17

1QFY18

2QFY18

2QFY15

3QFY15

4QFY15

1QFY16

2QFY16

3QFY16

4QFY16

1QFY17

2QFY17

3QFY17

4QFY17

1QFY18

2QFY18
Source: Company, Equirus Securities Source: Company, Equirus Securities

Exhibit 2: The housing: non-housing loan mix stands at ~89%:11% Exhibit 4: C/I ratio improves further to 14.3% from 14.9% in 1QFY18
Housing Loans Non-Housing Loans
100% 40%

80% 32%

60% 24%

40% 16%

20% 8%

0% 0%
4QFY15

1QFY16

2QFY16

3QFY16

4QFY16

1QFY17

2QFY17

3QFY17

4QFY17

1QFY18

2QFY18

1QFY15

2QFY15

3QFY15

4QFY15

1QFY16

2QFY16

3QFY16

4QFY16

1QFY17

2QFY17

3QFY17

4QFY17

1QFY18

2QFY18
Source: Company, Equirus Securities Source: Company, Equirus Securities

October 25, 2017 Analyst: Rohan Mandora rohan.mandora@equirus.com (+91-9737065666)/ / Ankit Choudhary ankit.choudhary@equirus.com Page3 of 13
 Canfin Homes Absolute – REDUCE Relative – Benchmark 2.9% ATR in 11 Months

Exhibit 5: NIMs remain stable at 3.64% Exhibit 7: Repayment /loans at 2QFY18-beginning rises to ~5.1% from 4.5% in 2QFY17
Average Yield on Assets Average Cost of Borrowing NIM - RHS
Repayments/ Opening qtr Loans
12% 4.0%
5.5%

3.5% 5.0%
10%
4.5%
3.0%
4.0%
8%
2.5% 3.5%

6% 2.0% 3.0%

1QFY16

2QFY16

3QFY16

4QFY16

1QFY17

2QFY17

3QFY17

4QFY17

1QFY18

2QFY18
4QFY15

1QFY16

2QFY16

3QFY16

4QFY16

1QFY17

2QFY17

3QFY17

4QFY17

1QFY18

2QFY18
Source: Company, Equirus Securities Source: Company, Equirus Securities

Exhibit 6: Share of market borrowing increases to 59% from 52% in 1QFY18

Banks NHB DEP Market Borrowings

20.0%

59.0% 19.0%

2.0%

Source: Company, Equirus Securities

October 25, 2017 Analyst: Rohan Mandora rohan.mandora@equirus.com (+91-9737065666)/ / Ankit Choudhary ankit.choudhary@equirus.com Page 4 of 13
 Canfin Homes Absolute – REDUCE Relative – Benchmark 2.9% ATR in 11 Months

Exhibit 8: Growth in disbursements and approvals remains weak in 2QFY18

Particulars (Rs Mn) 4QFY15 1QFY16 2QFY16 3QFY16 4QFY16 1QFY17 2QFY17 3QFY17 4QFY17 1QFY18 2QFY18
Loan Book 82,370 87,170 93,030 98,950 106,430 111,830 119,800 126,880 133,130 138,080 144,560
QoQ Growth 7.9% 5.8% 6.7% 6.4% 7.6% 5.1% 7.1% 5.9% 4.9% 3.7% 4.7%
YoY Growth 37.2% 32.2% 29.6% 29.2% 28.3% 28.8% 28.2% 25.1% 23.5% 20.7%
Approvals 9,110 8,730 10,990 10,860 13,600 11,910 15,170 13,510 13,920 11,860 15,750
QoQ Growth -0.1% -4.2% 25.9% -1.2% 25.2% -12.4% 27.4% -10.9% 3.0% -14.8% 32.8%
YoY Growth 9.1% 5.0% 19.1% 49.3% 36.4% 38.0% 24.4% 2.4% -0.4% 3.8%
Disbursements 8,760 8,070 9,490 9,680 11,980 10,520 12,990 12,070 12,340 11,530 13,470
QoQ Growth 2.7% -7.9% 17.6% 2.0% 23.8% -12.2% 23.5% -7.1% 2.2% -6.6% 16.8%
YoY Growth 13.3% 4.9% 13.5% 36.8% 30.4% 36.9% 24.7% 3.0% 9.6% 3.7%
Repayment 2,730 3,270 3,630 3,760 4,500 5,120 5,020 4,990 6,090 6,580 6,990
Repayment/Opening Loans 3.6% 4.0% 4.2% 4.0% 4.5% 4.8% 4.5% 4.2% 4.8% 4.9% 5.1%
12m rolling Approvals/Avg Loans 52.1% 49.7% 46.5% 45.3% 46.8% 47.6% 48.4% 48.0% 45.5% 43.6% 41.6%
12 m rolling Repayment/Avg Loans 13.5% 14.3% 14.9% 15.3% 16.1% 17.1% 17.3% 17.4% 17.7% 18.2% 18.6%

Source: Company, Equirus Securities

Exhibit 9: Share of salaried & professional class in O/S loans declines further to ~74%
4QFY15 1QFY16 2QFY16 3QFY16 4QFY16 1QFY17 2QFY17 3QFY17 4QFY17 1QFY18 2QFY18
Salaried & Professionals 84.4% 83.6% 82.8% 81.7% 80.4% 79.2% 77.8% 76.7% 75.3% 74.6% 73.9%
Non Salaried Class - Self Employed & Non Professionals 15.1% 15.9% 16.7% 17.8% 19.1% 20.5% 21.9% 23.0% 24.4% 25.1% 25.9%
Builders Loans 0.3% 0.3% 0.3% 0.3% 0.3% 0.2% 0.2% 0.2% 0.1% 0.1% 0.0%
Staff Loans 0.2% 0.2% 0.1% 0.2% 0.1% 0.1% 0.2% 0.1% 0.1% 0.1% 0.1%
Total 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%

Source: Company, Equirus Securities

October 25, 2017 Analyst: Rohan Mandora rohan.mandora@equirus.com (+91-9737065666)/ / Ankit Choudhary ankit.choudhary@equirus.com Page 5 of 13
 Canfin Homes Absolute – REDUCE Relative – Benchmark 2.9% ATR in 11 Months

Earnings call takeaways Exhibit 10: ROE-ROA Tree Analysis

Particulars FY16A FY17A FY18E FY19E FY20E
Business update
 Incremental approvals have been weak as home buyers await RERA implementation. Yield on Interest Earning Assets 11.1% 10.9% 10.3% 10.1% 10.1%
The company has seen a pick-up in July in states where RERA has been implemented.
Cost of Funds 9.1% 8.3% 7.6% 7.5% 7.5%
 CANF has secured approval for a Rs 10bn rights issue and awaits for an opportune
time contingent upon loan growth to raise the capital. Net Interest Margin 3.2% 3.5% 3.6% 3.4% 3.4%

 RERA, demonetization and GST-related issues are getting sorted out in the market. Advances (A) 106,430 133,130 161,661 200,261 240,313
 RERA complied schemes are coming up in the lower income group (LIG) and middle Investments (B) 149 161 0 0 0
income group (MIG) segments.
Interest Earning Assets (C)(A+B) 106,579 133,291 161,661 200,261 240,313
 Salaried class has deferred home buying decisions post demonetization and RERA
implementation. Average Interest Earning Assets (D) 94,549 119,935 147,476 180,961 220,287

 Credit related to CLSS has not been delayed in genuine cases where the carpet area NII/Avg Int Earning Assets 3.2% 3.5% 3.6% 3.4% 3.4%
restrictions are met.
Non Int Inc/Avg Int Earning Assets 0.4% 0.4% 0.4% 0.4% 0.4%
 Competition is stiff from well-established players, but not much from new players.
Total Income/Avg Int Earning Assets 3.6% 3.9% 4.0% 3.8% 3.8%
 Management stated that pre-payment pressure persists.
Op. Costs/Avg Int Earning Assets 0.7% 0.7% 0.6% 0.6% 0.6%
Earnings/Balance Sheet
 Yield on advances in the housing/non-housing book was 10%/12.5-13%. PPI/Avg Int Earning Assets 2.9% 3.2% 3.4% 3.3% 3.2%

 There is a difference of 25bps between salaried and non-salaried housing loans. Provisions/Avg Int Earning Assets 0.2% 0.2% 0.2% 0.2% 0.2%

 ~90% of CANF’s portfolio comprises housing loans, with an avg. ticket size of Rs 1.8mn. Taxes/Avg Int Earning Assets 1.0% 1.1% 1.1% 1.1% 1.1%
 Disbursements in Tamil Nadu are returning to normalcy. Return on Avg Int Earning Assets 1.7% 2.0% 2.1% 2.0% 1.9%
Branches Extraordinary item 0.0% 0.0% 0.0% 0.0% 0.0%
 CANF is cautious on opening new branches and is strictly examining the cost-benefit
analysis before opening any branch. Adj Return on Avg Int Earning Assets 1.7% 2.0% 2.1% 2.0% 1.9%
Productivity (Avg Int Earning
 The company added three affordable housing centers in the first week of October. 98.9% 98.9% 99.2% 99.4% 99.6%
Assets/Avg Total Assets)
Guidance Return on Average Total Assets 1.6% 1.9% 2.0% 1.9% 1.9%
 Management reiterated its 2020 loan book vision of Rs 350bn. Leverage (Average Total
11.6 12.4 12.5 12.4 12.2
Assets/Average Equity)
 CANF stated that it would not compromise on asset quality to achieve its
Return on Average Equity 19.0% 24.1% 25.4% 24.2% 23.7%
Rs 170bn loan book target for FY18.
 CANF expects salaried segment loan book growth to revive as the RERA, GST and Source: Company, Equirus Securities
demonetization related issues have diluted.
 Second half of the fiscal would be better than 1HFY18.
 FY19 and FY20 would be key years for HFCs, and achieving of the ‘Housing for All’
goal by 2022 would lead to a robust growth in these years for HFCs.

October 25, 2017 Analyst: Rohan Mandora rohan.mandora@equirus.com (+91-9737065666)/ / Ankit Choudhary ankit.choudhary@equirus.com Page 6 of 13
 Canfin Homes Absolute – REDUCE Relative – Benchmark 2.9% ATR in 11 Months

Company Snapshot
How we differ from Consensus Sensitivity to Key Variables % Change % Impact on EPS
- Equirus Consensus % Diff Comment
Net Interest Income 10 % 17.5 %
FY18E 22.8 22.4 1.7 %
EPS Provisioning Costs 10 % -0.9 %
FY19E 26.6 28.5 -6.5 %
NII + FY18E Loans & Advances Growth 10 % 1.3 %
5,829 9,580 -39.2 %
Other We expect consensus to be updated
Inc FY19E 6,951 11,848 -41.3 % ERoE Valuations & Assumptions
FY18E 3,031 3,064 -1.1 % Rf Ke Term. Growth RoE in Terminal Yr
PAT
FY19E 3,547 3,910 -9.3 % 6.8 % 14.0 % 5.0 % 21 %

Our Key Investment arguments: Loan growth for the company is moderating even as - FY18E FY19-22E FY23-27E FY28-37E
asset quality remains healthy and C/I ratio contained. PAT Growth 28.8 % 20.3 % 17.1 % 16.9 %
Dividend Payout (%) 10.5 % 33.3 % 25.0 % 25.0 %
Key Assumptions 2016A 2017A 2018E 2019E 2020E
BV growth 21.6% 18.3% 19.5% 17.7%
Yields on Advances (%) 11.1% 10.9% 10.3% 10.1% 10.1%
RoE (%) 25.4 % 25.0 % 22.9 % 21.2 %
Yield on Investments (%)
-
Cost of Funds (%) 9.1% 8.3% 7.6% 7.5% 7.5% Years of strong growth 1 5 10 20
NIMs (%) 3.2% 3.5% 3.6% 3.4% 3.4% Valuation as on date (Rs) 210 277 355 523
NII Growth (%) 69.4% 40.3% 24.3% 18.4% 21.2% Valuation as of 30th Sep’18 222 293 376 554
PPI Growth (%) 80.1% 42.1% 28.1% 18.4% 21.3%
Our Sep’18 target price of Rs. 554 implies 20 years of high growth with average RoE of
Provisions Growth (%) 36.2% -6.2% 48.1% 29.5% 26.1% 23%,cost of equity of 14%and terminal growth of 5% on ERoE basis.
PAT Growth (%) 82.2% 49.8% 28.8% 17.0% 21.0%
Company Description:
Advances Growth (%) 29.2% 25.1% 21.4% 23.9% 20.0%
CANF was incorporated in 1987; Canara Bank owns 30.0% stake in the company. CANF has
Key Risks:Margin pressure due to rate competition, and slowdown in fresh a pan-India presence with 177 branches including 33 satellite offices. Four southern
sanctions/disbursements. states (Karnataka, Tamil Nadu, Andhra Pradesh and Kerala) constitute ~76% of its loan
Key Triggers: Healthy growth in fresh sanctions and disbursements with improving book.
margins.

Comparable valuation P/E P/B BPS RoE Div Yield

Mkt Cap Price Target
Company Reco. CMP Rs. Mn. Target Date FY17A FY18E FY19E FY17A FY18E FY19E FY18E FY17A FY18E FY19E FY17A FY18E FY19E
CanFin REDUCE 539 71,728 554 Sep-18 30.5 23.7 20.2 6.7 98.3 4.4 98.3 24.1% 25.4% 24.2% 0.4% 0.4% 0.5%
GIC Housing NR 557 29,971 NR NR 18.1 15.0 12.7 3.2 2.7 2.1 184.1 18.8% 18.8% 18.8% 1.0% 1.2% 1.2%
REPCO Home Fin NR 801 50,109 NR NR 21.6 19.6 16.1 3.6 3.1 2.6 210.1 17.8% 17.8% 17.8% 0.4% 0.3% 0.3%

October 25, 2017 Analyst: Rohan Mandora rohan.mandora@equirus.com (+91-9737065666)/ / Ankit Choudhary ankit.choudhary@equirus.com Page 7 of 13
 Canfin Homes Absolute – REDUCE Relative – Benchmark 2.9% ATR in 11 Months

Standalone quarterly earnings forecast and key drivers

Rs in Mn 1Q17A 2Q17A 3Q17A 4Q17A 1Q18A 2Q18A 3Q18E 4Q18E 1Q19E 2Q19E 3Q19E 4Q19E FY17A FY18E FY19E FY20E
Interest Income 2,993 3,203 3,407 3,458 3,566 3,692 3,862 4,065 4,267 4,459 4,682 4,938 13,061 15,186 18,346 22,333
Interest Expense 2,074 2,193 2,304 2,269 2,332 2,413 2,527 2,668 2,811 2,944 3,098 3,283 8,840 9,940 12,135 14,803
Net Interest Income 919 1,010 1,103 1,189 1,234 1,280 1,336 1,397 1,457 1,515 1,584 1,656 4,221 5,246 6,212 7,531
Non Interest Income 103 121 89 157 122 146 153 162 171 180 189 200 470 584 739 887
Total Income 1,022 1,131 1,193 1,345 1,356 1,426 1,489 1,558 1,628 1,695 1,773 1,855 4,691 5,829 6,951 8,418
Operating and Other Expenses 182 198 194 233 203 204 217 231 244 257 272 287 807 855 1,060 1,272
Staff Cost 94 100 104 96 103 102 109 117 124 131 139 147 394 431 541 650
Other Operating Expenses 88 98 89 137 99 102 108 114 120 126 133 139 413 424 518 622
Pre-Provision Income 840 933 999 1,112 1,153 1,222 1,272 1,328 1,384 1,438 1,501 1,569 3,884 4,974 5,892 7,146
Provisions and Write-offs 55 60 60 7 42 80 72 76 81 85 89 94 182 270 349 441
PBT 785 873 939 1,105 1,112 1,142 1,200 1,251 1,303 1,353 1,412 1,474 3,702 4,705 5,542 6,706
TAX 288 322 343 396 400 392 432 450 469 487 508 531 1,349 1,674 1,995 2,414
Extraordinary 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
PAT 497 551 596 709 712 750 768 801 834 866 904 944 2,353 3,031 3,547 4,292
EPS 4 4 4 5 5 6 6 6 6 7 7 7 18 23 27 32
Key Drivers
YoA 11.0 % 11.1 % 11.0 % 10.6 % 10.5 % 10.5 % 10.4 % 10.4 % 10.3 % 10.3 % 10.2 % 10.2 % 10.9 % 10.3 % 10.1 % 10.1 %

CoF 8.5 % 8.4 % 8.3 % 7.8 % 7.7 % 7.7 % 7.7 % 7.6 % 7.6 % 7.6 % 7.6 % 7.6 % 8.3 % 7.6 % 7.5 % 7.5 %
NIM 3.4 % 3.5 % 3.6 % 3.7 % 3.6 % 3.6 % 3.6 % 3.6 % 3.5 % 3.5 % 3.5 % 3.4 % 3.5 % 3.6 % 3.4 % 3.4 %
C/I Ratio 17.8 % 17.5 % 16.2 % 17.3 % 14.9 % 14.3 % 14.6 % 14.8 % 15.0 % 15.2 % 15.3 % 15.4 % 17.2 % 14.7 % 15.2 % 15.1 %
CD Ratio 112.0 % 111.1 % 111.5 % 112.1 % 112.5 % 112.7 % 112.7 % 112.4 % 112.4 % 112.4 % 112.4 % 111.9 % 112.1 % 112.4 % 111.9 % 111.9 %
Non-Interest Income/ Total Income 10.1 % 10.7 % 7.5 % 11.6 % 9.0 % 10.2 % 10.3 % 10.4 % 10.5 % 10.6 % 10.6 % 10.8 % 10.0 % 10.0 % 10.6 % 10.5 %
ROA 1.8 % 1.9 % 1.9 % 2.2 % 2.1 % 2.1 % 2.1 % 2.0 % 2.0 % 2.0 % 2.0 % 1.9 % 1.9 % 2.0 % 1.9 % 1.9 %
ROE 22.1 % 23.4 % 24.1 % 27.1 % 26.0 % 26.0 % 25.0 % 24.9 % 24.7 % 24.1 % 23.7 % 23.7 % 24.1 % 25.4 % 24.2 % 23.7 %
Sequential Growth (%)
NII 6.0 % 9.9 % 9.2 % 7.7 % 3.8 % 3.7 % 4.4 % 4.6 % 4.3 % 4.0 % 4.5 % 4.5 %
TI 3.7 % 10.6 % 5.5 % 12.8 % 0.8 % 5.2 % 4.4 % 4.7 % 4.5 % 4.1 % 4.6 % 4.7 %
PPI 3.9 % 11.0 % 7.1 % 11.3 % 3.7 % 5.9 % 4.1 % 4.4 % 4.2 % 3.9 % 4.4 % 4.5 %
Provisions and Write-offs 290.1 % 9.1 % 0.0 % -88.2 % 484.5 % 91.8 % -9.2 % 5.5 % 6.0 % 5.0 % 5.0 % 6.0 %
PAT 4.8 % 10.7 % 8.2 % 18.9 % 0.5 % 5.3 % 2.4 % 4.3 % 4.1 % 3.8 % 4.4 % 4.4 %
EPS 4.8 % 10.7 % 8.2 % 18.9 % 0.5 % 5.3 % 2.4 % 4.3 % 4.1 % 3.8 % 4.4 % 4.4 %
Advances 5.1 % 7.1 % 5.9 % 4.9 % 3.7 % 4.7 % 5.5 % 6.0 % 5.0 % 5.0 % 6.0 % 6.0 %
Borrowings 5.4 % 7.9 % 5.6 % 4.3 % 3.4 % 4.5 % 5.5 % 6.3 % 5.0 % 5.0 % 6.0 % 6.5 %
Total Business 5.2 % 7.5 % 5.8 % 4.6 % 3.6 % 4.6 % 5.5 % 6.1 % 5.0 % 5.0 % 6.0 % 6.2 %
Yearly Growth (%)
NII 43.5 % 42.4 % 39.1 % 37.1 % 34.3 % 26.7 % 21.1 % 17.5 % 18.1 % 18.4 % 18.6 % 18.5 % 40.2 % 24.3 % 18.4 % 21.2 %
TI 46.4 % 41.2 % 30.3 % 36.5 % 32.7 % 26.1 % 24.8 % 15.8 % 20.0 % 18.9 % 19.1 % 19.1 % 37.9 % 24.3 % 19.3 % 21.1 %
PPI 55.0 % 46.8 % 33.8 % 37.6 % 37.3 % 31.0 % 27.3 % 19.4 % 20.0 % 17.7 % 18.0 % 18.2 % 42.1 % 28.1 % 18.4 % 21.3 %
Provisions and Write-offs 57.1 % -20.0 % -14.3 % -49.6 % -24.5 % 32.7 % 20.5 % 974.0 % 94.8 % 6.6 % 23.3 % 23.9 % -6.2 % 48.1 % 29.5 % 26.1 %
PAT 54.9 % 55.7 % 41.3 % 49.4 % 43.2 % 36.2 % 28.8 % 13.0 % 17.1 % 15.5 % 17.7 % 17.8 % 49.8 % 28.8 % 17.0 % 21.0 %
EPS 54.9 % 55.7 % 41.3 % 49.4 % 43.2 % 36.2 % 28.8 % 13.0 % 17.1 % 15.5 % 17.7 % 17.8 % 49.7 % 28.8 % 17.0 % 21.0 %
Advances 28.3 % 28.8 % 28.2 % 25.1 % 23.5 % 20.7 % 20.2 % 21.4 % 22.9 % 23.3 % 23.9 % 23.9 % 25.1 % 21.4 % 23.9 % 20.0 %
Borrowings 29.1 % 29.0 % 29.4 % 25.3 % 22.9 % 19.0 % 18.9 % 21.1 % 23.0 % 23.6 % 24.2 % 24.5 % 25.3 % 21.1 % 24.5 % 20.0 %
Total Business 28.7 % 28.9 % 28.8 % 25.2 % 23.2 % 19.9 % 19.6 % 21.3 % 23.0 % 23.4 % 24.0 % 24.2 % 25.1 % 21.4 % 23.9 % 20.0 %

October 25, 2017 Analyst: Rohan Mandora rohan.mandora@equirus.com (+91-9737065666)/ / Ankit Choudhary ankit.choudhary@equirus.com Page 8 of 13
 Canfin Homes Absolute – REDUCE Relative – Benchmark 2.9% ATR in 11 Months

StandaloneFinancials
P&L (Rs mn) FY17A FY18E FY19E FY20E Balance Sheet (Rs mn) FY17A FY18E FY19E FY20E Cash Flow (Rs mn) FY17A FY18E FY19E FY20E
Interest Income 13,061 15,186 18,346 22,333 Equity Capital 266 266 266 266 Operating PBT 3,702 4,705 5,542 6,706
Interest Expense 8,840 9,940 12,135 14,803 Reserve 10,497 12,822 15,921 19,700 Provisions & Depn. 182 270 349 441
NII 4,221 5,246 6,212 7,531 Deposits 0 0 0 0 Changes in Dep 0 0 0 0
Operating Exp 807 855 1,060 1,272 Borrowings 118,720 143,783 178,954 214,744 Changes in Borr 24,280 25,063 35,171 35,791
PPI 3,884 4,974 5,892 7,146 Current liabilities 5,097 5,801 6,279 6,063 Changes in Inv -91 665 478 -215
Provisions 182 270 349 441 Total Liabilities 134,580 162,672 201,420 240,774 Changes in L&A -26,663 -28,524 -38,600 -40,052
Non Int Inc 470 584 739 887 Net Fixed Assets 100 107 120 138 Changes in Others -124 32 0 0
Profit Before Taxes 3,702 4,705 5,542 6,706 Loans and Adv 133,130 161,661 200,261 240,313 Net Cash Ops -62 536 946 255
Tax 1,349 1,674 1,995 2,414 Investments 161 0 0 0 Net Cash from Inv -13 -20 -13 -18
Rep PAT bef ext 2,353 3,031 3,547 4,292 Int Earning Assets 133,291 161,661 200,261 240,313 Net Cash from Fin -370 -705 -449 -513
Extraordinary 0 0 0 0 Cash 181 904 1,038 322 Cash Generation -445 -189 484 -275
Adjusted PAT 2,353 3,031 3,547 4,292 Other LTA - - - - Ending Cash Balance 181 904 1,038 322
EPS (Rs) 17.7 22.8 26.6 32.2 OCA 1,008 0 0 0 RoE (%) 24.1 % 25.4 % 24.2 % 23.7 %
Adj EPS 17.7 22.8 26.6 32.2 Total Assets 134,580 162,672 201,420 240,774 Adjusted RoE (%) 24.1 % 25.4 % 24.2 % 23.7 %
BVPS (Rs.) 80.9 98.3 121.6 150.0 Yield 10.9 % 10.3 % 10.1 % 10.1 % RoA(%) 1.9 % 2.0 % 1.9 % 1.9 %
Adj BVPS (Rs.) 80.9 98.3 121.6 150.0 Cost of Funds 8.3 % 7.6 % 7.5 % 7.5 % Adjusted RoA (%) 1.9 % 2.0 % 1.9 % 1.9 %
DPS (Rs.) 2.0 2.4 2.8 3.2 P&L Provisions 182 270 349 441 CAR(%) 18.5 % 18.6 % 18.4 % 18.8 %
Provision/Avg Loans 0.1 % 0.2 % 0.2 % 0.2 % Cost to Income 17.2 % 14.7 % 15.2 % 15.1 % P/E 30.5 23.7 20.2 16.7
NIMs (%) 3.5 % 3.6 % 3.4 % 3.4 % Cost to Average Asset 0.7 % 0.6 % 0.6 % 0.6 % Adj P/E 29.0 20.2 16.5 13.1
NII Growth 40.2 % 24.3 % 18.4 % 21.2 % L&A Growth 25.1 % 21.4 % 23.9 % 20.0 % P/BV 6.7 5.5 4.4 3.6
Adj PAT Growth (%) 49.8 % 28.8 % 17.0 % 21.0 % Leverage 12.5 12.4 12.4 12.1 Adj P/BV 6.7 5.5 4.4 3.6
Adj EPS Growth (%) 49.7 % 28.8 % 17.0 % 21.0 % Advances/Borrowings 112.1 % 112.4 % 111.9 % 111.9 % Div Payout (%) 11.3 % 10.5 % 10.5 % 9.9 %
Adj BVPS Growth 22.6 % 21.6 % 23.7 % 23.3 % Change in Provisions -6.2 % 48.1 % 29.5 % 26.1 % Div Yield(%) 0.4 % 0.4 % 0.5 % 0.6 %
Dividend Gr. (%) -80.0 % 20.0 % 16.7 % 14.3 % GNPA 0.2 % 0.2 % 0.2 % 0.3 %
Tax Rate (%) 36.4 % 35.6 % 36.0 % 36.0 % NNPA 0.0 % 0.0 % 0.0 % 0.0 %
1 -yr forward P/E 1 -yr forward P/B
Price 10x 15x 20x 25x 800 Price 1x 2x 4x 6x
800
600 600
400 400
200
200
0
0
Apr-17
Oct-12
Jan-13
Apr-13

Oct-13
Jan-14
Apr-14

Oct-14
Jan-15
Apr-15

Oct-15
Jan-16
Apr-16

Oct-16
Jan-17

Oct-17
Jul-12

Jul-13

Jul-14

Jul-15

Jul-16

Jul-17

-200

Jul-12

Jan-13

Jul-13

Jan-14

Jul-14

Jan-15

Jul-15

Jan-16

Jul-16

Jan-17

Jul-17
Oct-12

Apr-13

Oct-13

Apr-14

Oct-14

Apr-15

Oct-15

Apr-16

Oct-16

Apr-17

Oct-17
October 25, 2017 Analyst: Rohan Mandora rohan.mandora@equirus.com (+91-9737065666)/ / Ankit Choudhary ankit.choudhary@equirus.com Page 9 of 13
 Canfin Homes Absolute – REDUCE Relative – Benchmark 2.9% ATR in 11 Months

Historical Standalone Financials

P&L (Rs mn) FY14A FY15A FY16A FY17A Balance Sheet (Rs mn) FY14A FY15A FY16A FY17A Cash Flow (Rs mn) FY14A FY15A FY16A FY17A
Interest Income 5,571 7,879 10,444 13,061 Equity Capital 205 266 266 266 Net Profit 1,064 1,372 2,539 3,702
Interest Expense 4,228 6,103 7,435 8,840 Reserve 4,318 7,449 8,514 10,497 Depreciation 44 142 194 182
Net Interest Income 1,343 1,776 3,009 4,221 Deposits 0 0 0 0 Changes in Dep 0 0 0 0
Operating Exp 441 550 668 807 Borrowings 52,685 69,409 94,780 118,720 Changes in Borr 17,296 9,740 32,014 24,280
PPI 1,111 1,517 2,733 3,884 Current liabilities 1,648 6,219 4,386 5,097 Changes in Inv 469 -366 2,134 -91
Provisions 44 142 194 182 Total Liabilities 58,856 83,344 107,946 134,580 Changes in L&A -18,404 -24,296 -24,569 -26,663
Non Int Inc 210 291 391 470 Net Fixed Assets 78 93 89 100 Changes in Others 10 -598 -98 -124
Profit Before Taxes 1,064 1,372 2,539 3,702 Loans and Adv 58,484 82,370 106,430 133,130 Net Cash from Ops 170 -14,518 11,247 -62
Tax 309 512 968 1,349 Investments 149 149 149 161 Net Cash from Inv -10 -15 4 -13
Rep PAT bef ext 755 860 1,571 2,353 Int Earning Assets 58,634 82,519 106,579 133,291 Net Cash from Fin -156 2,332 -505 -370
Extraordinary -2 -2 0 0 Cash 92 80 174 181 Cash Generation 4 -12,200 10,746 -445
Adjusted PAT 757 862 1,571 2,353 Other LTA - - - - Ending Cash Balance 92 80 174 181
EPS (Rs) 7.4 8.3 11.8 17.7 OCA 53 651 1,104 1,008 RoE (%) 17.9 % 14.1 % 19.0 % 24.1 %
Adj EPS 7.4 8.3 11.8 17.7 Total Assets 58,856 83,344 107,946 134,580 Adjusted RoE (%) 17.9 % 14.1 % 19.0 % 24.1 %
BVPS (Rs.) 44.2 58.0 66.0 80.9 Yield 11.2 % 10.8 % 10.7 % 10.6 % RoA(%) 1.5 % 1.2 % 1.6 % 1.9 %
Adj BVPS (Rs.) 44.2 58.0 66.0 80.9 Cost of Funds 9.6 % 10.0 % 9.1 % 8.3 % Adjusted RoA (%) 1.5 % 1.2 % 1.6 % 1.9 %
DPS (Rs.) 1.3 1.4 2.0 2.0 P&L Provisions 44 142 393 182 CAR(%) 13.8 % 18.4 % 20.7 % 18.5 %
Provision/Avg Loans 0.1 % 0.2 % 0.2 % 0.1 % Cost to Income 28.4 % 26.6 % 19.6 % 17.2 % P/E 72.9 65.0 45.7 30.5
NIMs (%) 2.7 % 2.5 % 3.2 % 3.5 % Cost to Average Asset 0.9 % 0.8 % 0.7 % 0.7 % Adj P/E 72.9 65.0 45.7 30.5
NII Growth 40.3 % 32.2 % 69.4 % 40.2 % L&A Growth 45.8 % 40.8 % 29.2 % 25.1 % P/BV 12.2 9.3 8.2 6.7
Adj PAT Growth (%) 39.5 % 13.9 % 82.6 % 49.8 % Leverage 13.0 10.8 12.3 12.5 Adj P/BV 12.2 9.3 8.2 6.7
Adj EPS Growth (%) 40.0 % 12.1 % 42.4 % 49.7 % C/D Ratio 111.0 % 118.7 % 112.3 % 112.1 % Div Payout (%) 17.6 % 108.0 % 84.7 % 11.3 %
Adj BVPS Growth 15.3 % 31.3 % 13.8 % 22.6 % Change in Provisions (%) -420.1 % 220.7 % 36.2 % -6.2 % Div Yield(%) 0.2 % 0.3 % 0.4 % 0.4 %
Dividend Gr. (%) 62.5 % 7.7 % 42.9 % 0.0 % GNPA 0.2 % 0.2 % 0.2 % 0.2 %
Tax Rate (%) 29.0 % 37.3 % 38.1 % 36.4 % NNPA 0.0 % 0.0 % 0.0 % 0.0 %

October 25, 2017 Analyst: Rohan Mandora rohan.mandora@equirus.com (+91-9737065666)/ / Ankit Choudhary ankit.choudhary@equirus.com Page 10 of 13
 Canfin Homes Absolute – REDUCE Relative – Benchmark 2.9% ATR in 11 Months

Equirus Securities
Research Analysts Sector/Industry Email Equity Sales E-mail
Abhishek Shindadkar IT Services abhishek.shindadkar@equirus.com 91-22-43320643 VishadTurakhia vishad.turakhia@equirus.com 91-22-43320633
Ashutosh Tiwari Auto, Metals & Mining ashutosh@equirus.com 91-79-61909517 SubhamSinha subham.sinha@equirus.com 91-22-43320631
Depesh Kashyap Mid-Caps depesh.kashyap@equirus.com 91-79-61909528 SwetaSheth sweta.sheth@equirus.com 91-22-43320634
DevamModi Power & Infrastructure devam@equirus.com 91-79-61909516 Viral Desai viral.desai@equirus.com 91-22-43320635
Dhaval Dama FMCG, Mid-Caps dhaval.dama@equirus.com 91-79-61909518 BinoyDharia binoy.dharia@equirus.com 91-22-43320632
Manoj Gori Consumer Durables manoj.gori@equirus.com 91-79-61909523 Dealing Room E-mail
Maulik Patel Oil and Gas maulik@equirus.com 91-79-61909519 Ashish Shah ashishshah@equirus.com 91-22-43320662
PrafulBohra Pharmaceuticals praful.bohra@equirus.com 91-79-61909532 IleshSavla ilesh.savla@equirus.com 91-22-43320666
Rohan Mandora Banking & Financial Services rohan.mandora@equirus.com 91-79-61909529 Manoj Kejriwal manoj.kejriwal@equirus.com 91-22-43320663
Associates E-mail Dharmesh Mehta dharmesh.mehta@equirus.com 91-22-43320661
Ankit Choudhary ankit.choudhary@equirus.com 91-79-61909533 SandipAmrutiya sandipamrutiya@equirus.com 91-22-43320660
Bharat Celly bharat.celly@equirus.com 91-79-61909524 Compliance Officer E-mail
Harshit Patel harshit.patel@equirus.com 91-79-61909522 Jay Soni jay.soni@equirus.com 91-79-61909561
Meet Chande meet.chande@equirus.com 91-79-61909513
Parva Soni parva.soni@equirus.com 91-79-61909521
Pranav Mehta pranav.mehta@equirus.com 91-79-61909514
Ronak Soni Ronak.soni@equirus.com 91-79-61909525
Samkit Shah samkit.shah@equirus.com 91-79-61909520
Shreepal Doshi shreepal.doshi@equirus.com 91-79-61909541
Vikas Jain vikas.jain@equirus.com 91-79-61909531
Rating & Coverage Definitions: Registered Office:
Absolute Rating
• LONG : Over the investment horizon, ATR >= Ke for companies with Free Float market cap >Rs 5 billion and ATR >= Equirus Securities Private Limited
20% for rest of the companies Unit No. 1201, 12th Floor, C Wing, Marathon Futurex,
• ADD: ATR >= 5% but less than Ke over investment horizon
• REDUCE: ATR >= negative 10% but <5% over investment horizon N M Joshi Marg, Lower Parel,
• SHORT: ATR < negative 10% over investment horizon Mumbai-400013.
Relative Rating
• OVERWEIGHT: Likely to outperform the benchmark by at least 5% over investment horizon Tel. No: +91 – (0)22 – 4332 0600
• BENCHMARK: likely to perform in line with the benchmark Fax No: +91- (0)22 – 4332 0601
• UNDERWEIGHT: likely to under-perform the benchmark by at least 5% over investment horizon
Investment Horizon
Investment Horizon is set at a minimum 3 months to maximum 18 months with target date falling on last day of a Corporate Office:
calendar quarter.
Lite vs. Regular Coverage vs. Spot Coverage 3rd floor, House No. 9,
We aim to keep our rating and estimates updated at least once a quarter for Regular Coverage stocks. Generally, we Magnet Corporate Park, Near Zydus Hospital, B/H Intas Sola Bridge,
would have access to the company and we would maintain detailed financial model for Regular coverage companies.
We intend to publish updates on Lite coverage stocks only an opportunistic basis and subject to our ability to contact S.G. Highway Ahmedabad-380054
the management. Our rating and estimates for Lite coverage stocks may not be current. Spot coverage is meant for Gujarat
one-off coverage of a specific company and in such cases, earnings forecast and target price are optional. Spot
coverage is meant to stimulate discussion rather than provide a research opinion. Tel. No: +91 (0)79 - 6190 9550
Fax No: +91 (0)79 – 6190 9560

© 2017 Equirus Securities Private Limited. All rights reserved. For Private Circulation only. This report or any portion hereof may not
be reprinted, sold or redistributed without the written consent of Equirus Securities Private Limited
October 25, 2017 Analyst: Rohan Mandora rohan.mandora@equirus.com (+91-9737065666)/ / Ankit Choudhary ankit.choudhary@equirus.com Page 11 of 13
 Canfin Homes Absolute – REDUCE Relative – Benchmark 2.9% ATR in 11 Months

Analyst Certification
We, Rohan Mandora/Ankit Choudhary, author to this report, hereby certify that all of the views expressed in this report accurately reflect my personal views about the subject company or companies and its or
their securities. I also certify that no part of my compensation was, is or will be, directly or indirectly, related to the specific recommendations or views expressed in this report.
Disclosures
Equirus Securities Private Limited (ESPL) having Corporate Identification Number U65993MH2007PTC176044 is registered in India with Securities and Exchange Board of India (SEBI) as a trading member on the
Capital Market (Reg. No. INB231301731), Futures & Options Segment (Reg. No.INF231301731) of the National Stock Exchange of India Ltd. (NSE) and on Cash Segment (Reg. No.INB011301737) of Bombay Stock
Exchange Limited (BSE).ESPL is also registered with SEBI as Research Analyst under SEBI (Research Analyst) Regulations, 2014 (Reg. No. INH000001154), as a Portfolio Manager under SEBI (Portfolio Managers
Regulations, 1993 (Reg. No.INP000005216) and as a Depository Participant of the Central Depository Services (India) Limited (Reg. No.IN-DP-324-2017). There are no disciplinary actions taken by any regulatory
authority against ESPL. ESPL is a subsidiary of Equirus Capital Pvt. Ltd. (ECPL) which is registered with SEBI as Category I Merchant Banker and provides investment banking services including but not limited to
merchant banking services, private equity, mergers & acquisitions and structured finance.
As ESPL and its associates are engaged in various financial services business, it might have: - (a) received compensation (except in connection with the preparation of this report) from the subject company for
investment banking or merchant banking or brokerage services in the past twelve months;(b) managed or co-managed public offering of securities for the subject company in the past twelve months; or (c) have
received a mandate from the subject company; or (d) might have other financial, business or other interests in entities including the subject company (ies) mentioned in this Report. ESPL & its associates, their
directors and employees may from time to time have positions or options in the company and buy or sell the securities of the company (ies) mentioned herein. ESPL and its associates collectively do not own (in
their proprietary position) 1% or more of the equity securities of the subject company mentioned in the report as the last day of the month preceding the publication of the research report. ESPL or its Analyst or
Associates did not receive any compensation or other benefits from the companies mentioned in the report or third party in connection with preparation of the research report. Accordingly, neither ESPL nor
Research Analysts have any material conflict of interest at the time of publication of this report. Compensation of our Research Analysts is not based on any specific merchant banking, investment banking or
brokerage service transactions. ESPL has not been engaged in market making activity for the subject company.
The Research Analyst engaged in preparation of this Report:-
(a) has not received any compensation from the subject company in the past twelve months; (b) has not managed or co-managed public offering of securities for the subject company in the past twelve months;
(c) has not received any compensation for investment banking or merchant banking or brokerage services from the subject company in the past twelve months; (d) has not received any compensation for products
or services other than investment banking or merchant banking or brokerage services from the subject company in the past twelve months; (e) has not received any compensation or other benefits from the
subject company or third party in connection with the research report; (f) might have served as an officer, director or employee of the subject company; (g) is not engaged in market making activity for the
subject company.
This document is not directed or intended for distribution to, or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction, where such distribution,
publication, availability or use would be contrary to law, regulation or which would subject ESPL and affiliates to any registration or licensing requirement within such jurisdiction. The securities described herein
may or may not be eligible for sale in all jurisdictions or to a certain category of investors. Persons in whose possession of this document are required to inform themselves of, and to observe, such applicable
restrictions. Please delete this document if you are not authorized to view the same. By reading this document you represent and warrant that you have full authority and all rights necessary to view and read this
document without subjecting ESPL and affiliates to any registration or licensing requirement within such jurisdiction.
This document has been prepared solely for information purpose and does not constitute a solicitation to any person to buy, sell or subscribe any security. ESPL or its affiliates are not soliciting any action based
on this report. The information and opinions contained herein is from publicly available data or based on information obtained in good faith from sources believed to be reliable but ESPL provides no guarantee as
to its accuracy or completeness. The information contained herein is as on date of this report, and is subject to change or modification and any such changes could impact our interpretation of relevant
information contained herein. While we would endeavour to update the information herein on reasonable basis, ESPL and its affiliates, their directors and employees are under no obligation to update or keep the
information current. Also there may be regulatory, compliance, or other reasons that may prevent ESPL and its group companies from doing so. This document is prepared for assistance only and is not intended
to be and must not alone be taken as the basis for an investment decision. Each recipient of this document should make such investigations as it deems necessary to arrive at an independent evaluation of an
investment in the securities of companies referred to in this document including the merits and risks involved. This document is intended for general circulation and does not take into account the specific
investment objectives, financial situation or particular needs of any particular person. ESPL and its group companies, employees, directors and agents accept no liability, and disclaim all responsibility, for the
consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this publication or for any decision based on it. ESPL/its affiliates do and seek to do business with
companies covered in its research report. Thus, investors should be aware that the firm may have conflict of interest.

A graph of daily closing prices of securities is available at http://www.nseindia.com/ChartApp/install/charts/mainpage.jsp and www.bseindia.com (Choose a company from the list on the browser and select the
“three years” period in the price chart).

October 25, 2017 Analyst: Rohan Mandora rohan.mandora@equirus.com (+91-9737065666)/ / Ankit Choudhary ankit.choudhary@equirus.com Page 12 of 13
 Canfin Homes Absolute – REDUCE Relative – Benchmark 2.9% ATR in 11 Months

Disclosure of Interest statement for the subject Company Yes/No If Yes, nature of such interest
Research Analyst’ or Relatives’ financial interest No
Research Analyst’ or Relatives’ actual/beneficial ownership of 1% or more No
Research Analyst’ or Relatives’ material conflict of interest No

Disclaimer for U.S. Persons

ESPL/its affiliates are not a registered broker–dealer under the U.S. Securities Exchange Act of 1934, as amended (the“1934 act”) and under applicable state laws in the United States. In addition Equirus is not a
registered investment adviser under the U.S. Investment Advisers Act of 1940, as amended (the "Advisers Act" and together with the 1934 Act, the “Acts”), and under applicable state laws in the United States.
Accordingly, in the absence of specific exemption under the Acts, any brokerage and investment services provided by Equirus, including the products and services described herein are not available to or intended
for U.S. persons. The information contained in this Report is not intended for any person who is a resident of the United States of America or a resident of any jurisdiction, the laws of which imposes prohibition
on soliciting the securities business in that jurisdiction without going through the registration requirements and/ or prohibit the use of any information contained in this report. This Report and its respective
contents do not constitute an offer or invitation to purchase or subscribe for any securities or solicitation of any investments or investment services and/or shall not be considered as an advertisement tool. "U.S.
Persons" are generally defined as a natural person, residing in the United States or any entity organized or incorporated under the laws of the United States. US Citizens living abroad may also be deemed "US
Persons" under certain rules.

October 25, 2017 Analyst: Rohan Mandora rohan.mandora@equirus.com (+91-9737065666)/ / Ankit Choudhary ankit.choudhary@equirus.com Page 13 of 13