Can Fin Homes shares tank 8% after firm reports Rs 38.5 crore fraud

economictimes.indiatimes.com:

Can Fin Homes tanked 8% to Rs 782 in Wednesday's trade on BSE after the company on Tuesday said that employees at one of its branches had committed fraud of nearly Rs 38.53 crore by transferring funds to different personal bank accounts. In an exchange filing, the company said that it estimates a one-time impact on its profitability of the same amount, without giving a timeline. It added that there was no impact on its assets or asset quality due to the incident.

The fraud was committed over a period of time and detected on July 24, 2023, Can Fin Homes said. The incident was found to be isolated to its branch in Ambala, Haryana. At 11.15 am, the stock was trading 7.8% lower at Rs 784.5 on BSE.

However, the stock has surged 44% in a year-to-date. In Q1 FY24, Can Fin Homes reported a 13.1% year-on-year (YoY) jump in net profit at Rs 183.5 crore for the first quarter that ended June 30, 2023. In the corresponding quarter last year, the company posted a net profit of Rs 162.2 crore.

Net interest income (NII), which is the difference between the interest income a bank earns from its lending activities and the interest it pays to depositors, increased 13.9%, coming at Rs 285.1 crore against Rs 250.4 crore in the corresponding quarter of FY23. As per Trendlyne data, the average target price of the stock is Rs 838 which shows an upside potential of 7% from the current market prices. The consensus recommendation from 13 analysts for the stock is a Buy.

Out of these analysts, ten have strong buy and buy ratings, while only one has a strong sell rating. The remaining two have hold ratings. The Relative Strength Index (RSI) is at 65.7.