This housing finance company dropped over 8%; Here's why

Today was not a good day for domestic benchmark indices, as investors removed their money in heavy amounts, taking Sensex below 108.06 points or 0.29% trading at 37,386.34 and Nifty 50 plunging by 26.65 points or 0.24% trading at 11,292.90 at around 11:18 hours. Almost every index on Sensex was feeling the heat today, especially small caps. But it needs to be noted that under small caps housing finance service Can Fin Homes was the worst performer of all. The share price of Can Fin has slipped by over 8% with an intraday low of Rs 334 per piece, and was currently trading at Rs 334.40 per piece down by Rs 29.55 or 8.12%. 

The decline in share price was despite Can Fin reporting a positive June 2018 quarter result. The company posted a net profit of Rs 77.39 crore as against Rs 69.71 crore in the corresponding period of the previous year, while revenue from operations were at Rs 407.26 crore in Q1FY19 as against Rs 366.78 crore a year ago same period. 

Can Fin Homes loan outstanding stood at Rs 16,199.43 crore in Q1FY19 vs Rs 13,782.62 crore in Q1FY18. 

One of the reason that can be attributed to the decline in share price would be rise in gross NPA. Can Fin recorded gross NPA ratio of 0.66% in Q1FY19 vs 0.38% in Q1FY18, while its net NPA ratio stood at 0.44% versus 0.17% in Q1FY18.

Also return on equity (ROE) slipped to 22.34% during this quarter as against 25.34% in Q1FY18.