On July 25, 2023, Can Fin Homes revealed that a fraud of approximately ₹38.53 crore had been committed by employees at its Ambala branch. The fraud involved the transfer of company funds into various personal bank accounts, resulting in an FIR being filed with the local police for ongoing investigations, as reported by CNBC-TV18.
Following the announcement, Can Fin Homes’ shares fell by 8% to ₹782 in Wednesday’s trade on BSE. However, in an exchange filing, the company assured shareholders and investors that there would be no significant effect on its assets or asset quality due to the fraud.
While acknowledging the potential one-time impact on profitability, the company refrained from providing a specific timeline. Can Fin Homes disclosed that the fraud had been ongoing for an unspecified period, and was detected on July 24, 2023. The fraudulent activity was isolated to the Ambala branch in Haryana.
By 12.30 PM, the company’s shares had dipped further to ₹772.5, marking a 9.2% decline on BSE. Notwithstanding the setback, the company’s stock has risen by 44% year-to-date.
In the first quarter of FY24, Can Fin Homes had reported a promising 13.1% YoY increase in net profit, which stood at ₹183.5 crore. The net interest income (NII) also saw a 13.9% increase, amounting to ₹285.1 crore.
Trendlyne data indicates a potential 7% upside for the stock, with an average target price of ₹838. Out of 13 analysts, ten recommended a strong buy or buy rating for the stock, while one advised a strong sell. Two analysts suggested a hold.
The company’s Relative Strength Index (RSI) is currently at 65.7, while its MACD is at 25.3, suggesting a bullish indicator.
At the time of writing, Can Fin Homes is trading with a market cap of ₹ 10,291 Crore. In its most recent quarterly report for Q1 FY2024, which ended in June, Can Fin Homes reported a profit of INR 183 crore.
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