Axis Bank shares tank over 5% after earnings

Shares of Axis Bank ended over 5 per cent lower on Monday, wiping out Rs 22,638.33 crore from its market valuation, as the company’s June quarter numbers failed to cheer investors.

The stock tanked 5.48 per cent to settle at Rs 1,256.10 on the BSE. Intraday, it tumbled 6 per cent to Rs 1,249.05.

At the NSE, the stock declined 5.45 per cent to end at Rs 1,256. The company’s market valuation eroded by Rs 22,638.33 crore to Rs 3,90,768.52 crore.

Axis Bank on Saturday reported a 22.23 per cent jump in consolidated profit for the June quarter at Rs 7,632.31 crore, helped by a narrowing of provisions.

On a standalone basis, the third-largest private sector lender’s net profit jumped 23 per cent to Rs 7,114 crore.

Its core net interest income grew 8 per cent to Rs 14,646 crore on the back of a 19 per cent jump in advances and a narrowing in the net interest margin to 3.46 per cent from the 3.80 per cent in the year-ago period and the quarter-ago period’s 3.73 per cent.

Its Chief Executive and Managing Director Amitabh Chaudhry said the NIM (Net Interest Margin) is at the bottom in the current cycle, hinting that it will rise from here on, but refrained from giving any aspirational number for the near future.

He said the FCNR(B) scheme, under which the banks are expected to get deposits from the diaspora, will also influence the NIM number going forward as it will bring additional liquidity that was not budgeted for, and can help with a paydown of high-cost liabilities.

The Gross Non-performing Assets (GNPA) ratio inched up to 1.28 per cent quarter-on-quarter as compared with March-end’s 1.23 per cent.

“Markets remained under pressure on Monday and ended lower amid disappointing earnings from private banking majors and renewed geopolitical concerns. Investor sentiment remained subdued after quarterly earnings from major private banks disappointed on the margin front, triggering a sharp sell-off in banking heavyweights,” Ajit Mishra — SVP, Research, Religare Broking Ltd, said.

The 30-share BSE Sensex declined 442.93 points, or 0.57 per cent, to settle at 77,708.52. The 50-share NSE Nifty edged lower by 95.80 points, or 0.39 per cent, to end at 24,238.50.