After falling over 7 per cent on Wednesday the share price of Axis Bank plunged as much as 3 per cent on Thursday amid concerns about the bank selling its loans to asset reconstruction companies at steep discount during the last quarter. (Photo: Reuters)

After falling over 7 per cent on Wednesday the share price of Axis Bank plunged as much as 3 per cent on Thursday amid concerns about the bank selling its loans to asset reconstruction companies at steep discount during the last quarter.

At 11.52 am, Axis Bank share price was at Rs 470.50, down 2.58 per cent, against Rs 482.95 in the previous trading session. The scrip opened at Rs 486 on Thursday and had touched a high and low of Rs 486 and Rs 468, respectively, in trade so far.

The bank had announced its quarterly earnings on Tuesday. During the quarter ending in September, Axis Bank reported a 18.93 per cent rise in net profit at Rs 1,915.64 crore. Net interest income saw a growth of 15.24 per cent on a y-o-y basis to Rs 4,062.09 crore.

In Q2FY2016, the advances growth picked up (23.1 per cent YoY) led by a strong uptick in corporate and retail loans (up 24.6 per cent and 26.6 per cent respectively). On the asset quality front, the reported NPA ratio remained stable on a sequential basis. However, the bank sold loans worth Rs 1,850 crore to asset reconstruction company (ARC) for a transaction of Rs 650 crore (security receipts plus cash) due to stress in these accounts. The bank made impairment provision of Rs 336 crore towards sale of loans and utilised Rs 850 crore contingency provisions. The restructured loans were largely stable at around 2.8 per cent of the book.

For the further movement, KR Choksey Shares and Securities in a research note said, “Axis Bank has been able to deliver consistent core operating earnings with superior retail loan book accretion and consistent healthy fee-income performance. While Axis Bank boasts of well capitalised balance sheet and rich liability franchise supported by its huge presence in retail and corporate lending, the credit quality concerns now have come to the fore. Against this backdrop, we maintain ‘Accumulate’ rating on the stock with a target price of Rs 600.”

Prabhudas Lilladher in a research note said, “We expect stock to remain under pressure in near term but maintain positive stance from a medium term perspective. We believe the share price of Axis Bank can touch Rs 615 in the next few quarters.”

Raymond reported a massive fall of 86.14 per cent in its consolidated net profit at Rs 9.44 crore for the second quarter ended September 30, 2015.

Raymond share price declined as much as 4.4 per cent in the early trade on Thursday after the diversified group reported a massive fall of 86.14 per cent in its consolidated net profit at Rs 9.44 crore for the second quarter ended September 30, 2015 on account of under-performance of its engineering business. The company posted a consolidated bottomline figures of Rs 68.12 crore in the corresponding quarter a year ago.

At 9.32 am, shares of Raymond were trading 3 per cent down at Rs 430.95. The scrip opened at Rs 436 and had touched a high and low of Rs 436 and Rs 424.55, respectively, in trade so far. Sensex was down 0.28 per cent at 26,965.06.

Raymond’s total consolidated income from operation during the quarter under review increased by 2.18 per cent to Rs 1,492.59 crore as against Rs 1,460.74 crore during the same period of last financial year, Raymond said in a filing to the the BSE.

In the past one year, the share price of Raymond plunged 11.74 per cent to Rs 444.15 on October 28. Sensex gained 0.59 per cent during the same period.

Sun Pharma shares will be in focus after the drug major said on Wednesday that it is recalling over ten lakh boxes of its anti-allergic Loratadine drug from the US market as the lot was found to be ‘super potent’ and ‘out of specification’. (Photo: PTI)

Domestic equity markets are expected to open in negative zone following mixed global cues after US Federal Reserve kept the key rates unchanged, but hinted at a December interest rate hike after its two-day meeting that ended on Wednesday.

Benchmark indices fell for the third straight day on Wednesday as traders awaited FOMC rate decision. Sensex closed 213.68 points down at 27,039.76 on Wednesday while Nifty closed 61.70 points down at 8,171.

Below are the stocks that are likely to be in focus today

Wipro: Wipro shares will be in focus as the company has won a five-year IT contract from Coop Norge Handel AS (Coop Norge), a leading retailer in Norway.

Jet Airways: Jet Airways reported 25 per cent jump in net profit at Rs 87.59 crore in the second quarter of this fiscal, ended September 30, boosted by low aviation turbine fuel prices and high passenger traffic.

Sun Pharma: The drug major is recalling over ten lakh boxes of its anti-allergic Loratadine drug from the US market as the lot was found to be ‘super potent’ and ‘out of specification’.

Amtek Auto: The auto parts maker is looking to sell its German unit Tekfor, a business with sales of more than 500 million euros ($554 million), according to a Reuters report. Amtek, which is on a drive to cut debt, has appointed Morgan Stanley to organise the sale of the maker of driveline components formerly known as Neumayer Tekfor, just two years after buying it out of an insolvency, the sources said.

NTPC: The thermal power company is expected to announce its second quarter results on Thursday.

Reliance Industries: Reliance Jio Infocomm on Wednesday said it is planning to raise Rs 3,000 crore by issuing secured redeemable non-convertible debentures on private placement basis.

Novartis India: Sandoz, the generic drug arm of Swiss drug major Novartis, has received a warning letter from the US health regulator for violations of current good manufacturing practice (cGMP) norms at its two plants in Western India.

NALCO: The public sector aluminium major, which had declared a total dividend of Rs 451.02 crore for 2014-15 forming 35 per cent of paid up capital, on Wednesday paid the final amount to the central government.

JSW Energy: The Sajjan Jindal-controlled company posted 54.3 per cent rise in consolidated net profit at Rs 491.96 crore for the quarter ended September 30, helped by higher net generation and lower fuel costs.

Raymond: The diversified group reported a massive fall of 86.14 per cent in its consolidated net profit at Rs 9.44 crore for the second quarter ended September 30, 2015 on account of under-performance of its engineering business.

Transport Corporation of India: The company has received an approval for formation of wholly owned direct subsidiary in Bangladesh. The board of directors at their meeting held on October 28, 2015 has approved for the same.

Bharat Electronics, Bharat Forge, Crompton Greaves, Dishman Pharmaceuticals, Dr Reddy’s Labs and Emami are some of companies which may announce their earnings on Thursday.

Sundaram BNP Paribas Home Finance, a subsidiary of Sundaram Finance, has registered a 27% increase in its net profit at Rs 40.52 crore for Q2 as compared to Rs 31.95 crore registered in the same period last year.

Income from operations stood at R242 crore as compared to R238 crore, registering a growth of 1.68% while loans under management stood at R7535 crore as on September 30, 2015.

The company registered home loan disbursements of R450 crore in Q2 as compared to R537 crore in the corresponding quarter last year.

Srinivas Acharya, MD, Sundaram BNP Paribas Home Finance said: “The real estate sector continues to be sluggish. Recovery has been delayed and still seems at least a few months away. We are continuing to witness stiff resistance from buyers and the quantum of unsold stock remains a concern. Improvement in hiring sentiments, especially in the IT sector, could trigger a recovery in the home buying space later this year.’

In the first week of October, the company had lowered its PLR for home loans by 25 basis points to 9.65%. The company recently cut its deposit rates by 25 basis points to 8% per annum for 12, 18, 48 and 60 months and 8.25% for 24 and 36 month deposits (additional 0.50% for senior citizens). Deposit base was increased to R958 crore as at the end of September 2015. Sundaram BNP Paribas Home Finance is a 50.1%-49.9% JV between Sundaram Finance and BNP Paribas of France.

SKS Microfinance on Wednesday said it has received a loan of Rs 100 crore from Micro Units Development and Refinance Agency (Mudra), a government initiative to help micro-entrepreneurs.

The Hyderabad-based microfinance firm said that the Mudra loan, which comes at a 10% annual rate of interest, is cheaper than loans from financial institutions. This would help it bring down the cost of interest-bearing liabilities, the company said.

The development helped the company’s shares move up by 6.37% to R425.65 on BSE on Tuesday.

Microfinance firms such as SKS typically borrows from banks and financial institutions and provide small loans for individuals and small businesses. The company said it has brought down its interest rates by 3.8% to 20.75%. The interest-bearing liabilities have come down to 11.9% in the first quarter this fiscal year from 13.6% in FY14 because of downward adjustments in risk premium. Since October 2014, interest rates have dropped thrice.

“At a rate of 10%, this is lower than regular term loans from conventional lenders, and reinforces our assertion in the recent past that the non banking financial company – micro finance institution (NBFC-MFI) structure does not preclude us from availing dedicated refinance lines at a lower rate of interest. We are already the lowest cost lender in the MFI segment, and will pass on this benefit to our microfinance borrowers,” said Dilli Raj, president, SKS Microfinance. “This is the first refinance line availed by us,” Raj said.

According to Digant Haria of Antique Stock Broking, SKS is the lowest cost micro lender, has the best liability profile, operates mostly in rural areas and follows the most rigorous customer interaction process.

“The next 18 months would be the transition phase for MFIs who have been awarded small bank licenses as they comply with RBI’s cap on inter-bank lending limits, CRR and SLR. This could potentially provide opportunity to a formidable player like of SKS, who is well capitalised. Business momentum was exceptionally strong with gross portfolio growing 14% QoQ. The strong growth was achieved through a combination of higher ticket sizes (9% sequential growth) and newer customer acquisition (4% sequential growth). Growth was uniformly spread across the states where it operates,” he said.

Mudra from its inception earlier this year has financed a host of MFIs including Ujjivan Microfinance, Equitas Holdings, Satin Creditcare and Aarohan Financial Services.