Can Fin Homes shares under pressure after CEO resigns. Here’s what analysts say

Can Fin Homes in the regulatory release added that Kousgi will continue to function as the Managing Director & CEO and discharge duties till the date of his relieving.

Kousgi’s resignation is a setback as Can Fin delivered a healthy balance of growth & good asset quality despite Covid during his tenure, as per analysts at global brokerage Jefferies. “We await clarity around new CEO & his growth strategy. An external CEO from industry may be viewed more favourably by investors. Uncertainty around upcoming mgmt change would be an overhang near term, but core fundamentals stays healthy,” the note stated.

The brokerage house has retained Buy tag on Can Fin Homes shares with a target price of ₹730 apiece. The stock is almost flat in year to date terms.

“Mr Kousgi was appointed as MD in September 2019 for 5 years, and during his tenure as CEO, Can Fin delivered a healthy balance of growth and asset quality despite Covid. We look for more clarity around new CEO and his growth strategy. Mr Kousgi’s predecessors were generally from parent Canara Bank. An external CEO from the industry may be viewed more favorably vs. CEO deputed from Canara Bank,” Jefferies added.

Strong demand for mid ticket housing loans in salaried segment, competitive funding costs could drive 18% loan CAGR over FY22-25e. Spreads may decline over FY22-25e due to higher CP mix and steeper rise in CP rates, as per the brokerage.

Further, it believes that the asset quality should stay stable, which should support stable credit costs and expects Can Fin to deliver strong EPS CAGR and 15+% ROE over FY22-25E. Also, overhang related to audit should ease as limited irregularities were detected, it said.

The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.

Post your comment
First article