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The IUP Journal of Accounting Research and Audit Practices:

Effect of Financial Performance on Share Price: A Comparative Analysis of India Bulls Housing Finance Ltd.

Article Details

Pub. Date	: July, 2023
Product Name	: The IUP Journal of Accounting Research and Audit Practices
Product Type	: Article
Product Code	: IJARAP050723
Author Name	: P Hanumantha Rao* and Ajay Kumar Sinha
Availability	: YES
Subject/Domain	: Finance
Download Format	: PDF Format
No. of Pages	: 13

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Abstract

A company's share price is expected to move in tandem with its business growth. However, sometimes the share price may not be a true indicator of the firm's financial performance. The paper considers the case of India Bulls Housing Finance Ltd. (IBHFL), whose shares fell by almost 90% in the last 4 to 5 years. The paper investigates the causes of such a drastic fall and also compares the financial soundness of the firm with its two nearest competitors-Can Fin Homes Ltd. (CFHL) and PNB Housing Finance Ltd. (PNBHFL). The key variables considered are stock prices, Current Ratio (CR), Return on Assets (ROA), Return on Equity (ROE), Debt-Equity Ratio (DER) and Interest Coverage Ratio (ICR). The financial variables are studied over the last five financial years. It is observed that IBHFL faced several qualitative developments along with financial performance which is responsible for the sharp decline in stock prices.

Description

India has one of the fastest growing economies in the world. And given the current growth scenario, the housing sector deserves special mention as one of the important drivers of growth.

The true measure of a nation's development is not the height of skyscrapers in its metropolitan cities, but rather the increase in real estate development in its smaller towns, villages and second and third-tier cities. As India marks its 75th year of independence, a significant milestone is being reached. The brilliant emergence of India's towns and villages, which are being bolstered by strong infrastructure, is the pinnacle of our nation's development. Additionally, the real estate market is being utilized to the fullest extent due to the growing demand from individuals.