Rakesh Jhunjhunwala Stock: Notwithstanding robust Q4 results, Canara Bank shares close 8% lower on Monday; know reasons here!

Rakesh Jhunjhunwala Portfolio: Despite robust March quarter results, this Rakesh Jhunjhunwala-backed Canara Bank closed 8 per cent lower to Rs 201.45 per share on the BSE on Monday. The company on Friday reported 65 per cent year-on-year growth in profit and its asset quality has also improved during the Q4 quarter.  

The analyst reasoned out that this fall was mainly due to the negative news related to Can Fin Homes, while the negative market sentiment acted as fuel to the fire. A media report claimed that the Reserve Bank of India may launch a probe into the detection of fraud in 37 accounts of Can Fin. 

Can Fin Homes on Monday refuting such news, clarified, “We confirm that, to the Company's knowledge, currently there is no such information or event which is significant and price-sensitive, which the company may need to disseminate to the investors for their information.” 

The shares of Can Fin Homes also witnessed a downward rally, eventually to close over 5.5 per cent to Rs 514.65 per share on the BSE as compared to a 0.67 per cent fall in the S&P BSE Sensex. 

TradeSwift Director Sandeep Jain said, “The psychological impact is huge in such cases, the promoter has to face the wrath of a subsidiary, as it happened in Axis Bank.” 

“In book value type, the promoter gets 50 per cent profit of its subsidiary, and when it comes to corporate governance and mismanagement issues, in this, questions are raised on promoters,” Jain further explained.  

Canara Bank’s standalone net profit grew by 65 per cent YoY to Rs 1,666.22 crore in the fourth quarter of the financial year 2021-22 (Q4FY22) as against Rs 1,010.87 crore in a year-ago quarter.  

On the asset quality front, Canara Bank's gross non-performing assets (NPAs) or bad loans fell to 7.51 per cent, as against 8.93 per cent YoY and Net NPAs also got better at 2.65 per cent in the quarter under review, from 3.82 per cent YoY, the regulatory filing also said.   

Billionaire investor Rakesh Jhunjhunwala, who is also termed as a Big Bull of the Indian stock market, holds 35,597,400 equity shares, which aggregates to a 2 per cent stake in Canara Bank, as per the latest BSE shareholding pattern of the company.