We have released 26th Jul’23 – Canfin Homes coverage closure update. For other updates, please refer the following link – https://katalystwealth.com/category/latest-updates/
Date: 26th Jul’23
Canfin Homes (NSE – CANFINHOME) – May’13 Alpha stock
CMP – 771.10 (BSE); 770.75 (NSE)
Rating – Negative and Coverage closure; this is not an investment advice (refer rating interpretation)
Canfin Homes stock recommendation was initiated in May’13 around 30 odd levels.
Yesterday, 25th Jul’23, the company intimated the exchanges about fraud committed by employees of Ambala branch of the company.
The employees transferred the funds to different personal bank accounts by misusing the cheque signing authority given.
As per the management, the estimated amount involved is around Rs 38.53 crore.
The company has lodged the FIR and will write off the entire amount in Q2 FY 24 quarterly results.
Prior to this, in May’22, the company found out about fraud in 37 accounts worth Rs 3.9 crore.
We believe, this time the quantum of fraud is substantially large and raises concerns about the checks and systems in place at the company.
Further, the stock has also risen quite sharply in the last few months and currently trades around 2.7 times its book value.
Over the last 5 years, the stock has traded largely in the range of 2-3.4 times book value.
Thus, considering the recurrence of fraud and a rather large one and the probability that the stock may again correct to lower range of book value, we have a negative rating on the stock and closing coverage on the same.
Disclosure: My father holds investment in Canfin Homes.
Ph.: +91-727-5050062, Mob: +91-9818866676
Email: [email protected]
Positive – Expected return of ~15% + on annualized basis in medium to long term for investment recommendations and in short term for Special situations
Neutral – Expected Absolute return in the range of +/- 15%
Negative – Expected Absolute return of over -15%
Coverage closure – No further update on the stock
% weightage – allocation in the subject stock with respect to equity investments
Short term – Less than 1 year
Medium term – Greater than 1 year and less than 3 years
Long term – Greater than 3 years
Research Analyst Details
Name: Ekansh Mittal Email Id: [email protected] Ph: +91 727 5050062
Analyst ownership of the stock: No
Details of Associates: Not Applicable
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Disclosure (SEBI RA Regulations)
Whether the research analyst or research entity or his associate or his relative has any financial interest in the subject company/companies and the nature of such financial interest – Father holds investment in Canfin Homes
Whether the research analyst or research entity or his associates or his relatives have actual/beneficial ownership of 1% or more securities of the subject company (at the end of the month immediately preceding the date of publication of the research report or date of the public appearance) – No
Whether the research analyst or research entity or his associate or his relative has any other material conflict of interest at the time of publication of the research report or at the time of public appearance – No
Whether it or its associates have received any compensation from the subject company in the past twelve months – No
Whether it or its associates have managed or co-managed public offering of securities for the subject company in the past 12 months – No
Whether it or its associates have received any compensation for investment banking or merchant banking or brokerage services from the subject company in the past 12 months – No
Whether it or its associates have received any compensation for products or services other than investment banking or merchant banking or brokerage services from the subject company in the past 12 months – No
Whether the subject company is or was a client during twelve months preceding the date of distribution of the research report and the types of services provided – No
Whether the research analyst has served as an officer, director or employee of the subject company – No
Whether the research analyst or research entity has been engaged in market making activity for the subject company – No