Can Fin Homes Falls 15% In Three Days After CEO Exit, Ransomware Attack

The resignation of Can Fin Homes CEO Girish Kousgi is a setback amid ransomware attack, Jefferies says.

<div class="paragraphs"><p>A Can Fin Homes branch. (Photo: Company website)</p></div>
A Can Fin Homes branch. (Photo: Company website)

Shares of Can Fin Homes Ltd. declined for a third day after a ransomware attack took down the company's website and the lender's chief executive officer resigned in quick succession.

The stock's decline started on Friday, when it closed 4.4% lower after it informed the exchanges of a ransomware attack. "We have been informed by the vendors that there has been ransomware attack on our website noticed on Sept. 14, due to which the company’s official website is down."

The company said that there has been no impact on the operations or performance due to the attack and the incident has been reported to Indian Computer Emergency Response Team, Reserve Bank of India and National Housing Bank. The issue was resolved on Sept. 16, according to the company.

Shortly after the markets closed on Monday, the Canara Bank-promoted company said Girish Kousgi has resigned as CEO and managing director due to personal reasons. The stock had closed 7.1% lower on Monday.

On Tuesday, the scrip fell as much 7.6% reacting to the developments. In total, the stock has fallen over 15% in the last three sessions.

Jefferies termed Kousgi's resignation as a "setback" as Can Fin delivered a healthy balance of growth and good asset quality, despite the pandemic.

"We await clarity around new CEO and his growth strategy. An external CEO may be viewed more favourably by investors. Uncertainty around upcoming management change would be an overhang , near-term, but core fundamentals stays healthy," Jefferies said in a note dated Sept. 19, retaining 'buy' on the company.

Jefferies has a target price of Rs 730 apiece on Can Fin Homes, implying a potential upside of 15%. It sees strong demand for mid-ticket housing loans in salaried segment and competitive funding costs driving 18% loan CAGR over FY22-25.

Of the 15 analysts tracking the company, 13 maintain a 'buy' and two suggest a 'hold', according to Bloomberg data. The 12-month consensus price target implies an upside of 26.8%.