Can Fin Homes plunges 6% on Girish Kousgi’s exit

Can Fin Homes plunges 6% on Girish Kousgi’s exit

The stock briefly slipped to below its two-month low of Rs 571.20. Jefferies says the uncertainty around upcoming change would be an “overhang” on the stock and an external CEO would may be viewed more favourably

Girish Kousgi had joined Can Fin Homes as its MD & CEO in Sept 2019 (Image: LinkedIn/Girish-Kousgi)

The share price of Can Fin Homes declined 6 percent in the morning trade on September 20, a day after its managing director and chief executive officer Girish Kousgi resigned due to “personal reasons”.

The stock slipped to Rs 545 after the market opened and briefly slipped below its two-month low of Rs 571.20 hit on August 22. At 10.08 am, the scrip was trading 4.78 percent lower at Rs 561.70 on the NSE.

In a regulatory filing dated September 19, the housing finance firm said, “Girish Kousgi, managing director & CEO of the company, has conveyed to the Board about his decision to resign from the post for personal reasons.”

“He will continue to function as the managing director & CEO and discharge duties till the date of his relieving.”

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Kousgi, who has spent more than 17 years in retail banking, was appointed the top boss in September 2019 for five years.

According to global brokerage firm Jefferies, uncertainty around upcoming management change would be an “overhang” on the stock.

As investors await clarity on the new CEO and their growth strategy, Jefferies believes that an external CEO may be viewed more favourably by investors.

It has a “buy” rating on the stock with a target price of Rs 730 a share. While Kousgi’s resignation is a setback, Jefferies says “The company has delivered healthy growth and good asset quality, despite COVID-19.”

In Q1FY23, the company’s net profit rose 49 percent to Rs 162.21 crore on a 35.7 percent increase in total income to Rs 611.58 crore over Q1 FY22. The bank’s gross non-performing assets (NPAs) stood at Rs 179.78 crore as on June 30, 2022 as against Rs 199.99 crore as on June 30, 2021.

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