Axis Bank shares tumble over 7 pc after Q1 earnings

New Delhi, Jul 18 (PTI) Shares of Axis Bank on Friday tanked over 7 per cent after the company reported a 3 per cent dip in June quarter consolidated net profit.

The stock dropped 7.40 per cent to Rs 1,073.95 on the BSE.

At the NSE, it tumbled 6.36 per cent to Rs 1,086 apiece.

The stock emerged as the biggest laggard among the Sensex and Nifty firms during morning trade.

In the equity market, the 30-share BSE Sensex was trading 551.93 points lower at 81,707.31. The 50-share NSE Nifty quoted 164.65 points down at 24,943.60.

Devarsh Vakil, Head of Prime Research, HDFC Securities said Axis Bank’s latest financial results fell short of market expectations.

"Notably, Axis Bank's GDR tumbled 4.8 per cent to USD 64.30 on Thursday, following a deterioration in the bank’s asset quality during the June quarter," he said.

Axis Bank on Thursday reported a 3 per cent dip in its June quarter consolidated net profit at Rs 6,243.72 crore, impacted by the implementation of changes in non-performing assets and loan upgrade policy.

On a standalone basis, the third largest private sector lender's net profit declined to Rs 5,806 crore, from the year-ago period's Rs 6,034 crore, but was down sharply when compared with the quarter-ago period's Rs 7,117 crore.

"Axis Bank reported disappointing 1Q numbers with a PAT decline of 4 per cent YoY," according to JM Financial Institutional Securities Ltd.

The bank's core income showed low growth in the reporting period, but it was a Rs 614 crore hit brought about by what it called a "technical impact" which hurt the profits.

The bank's managing director and chief executive Amitabh Chaudhry told reporters that it decided to adopt a more prudent way of asset recognition, upgrades and treatment of accounts which have seen one-time settlements, as it had announced in the previous quarter, and added that economic losses due to the change will be "minimum" going ahead.

The gross non-performing assets ratio increased to 1.57 per cent from 1.28 per cent in the quarter-ago period, largely because of the technical impact.

The gross slippages came at Rs 8,200 crore, as against Rs 4,805 crore in the preceding quarter, the bank said, adding that adjusting for the technical impact, the gross slippages stood at Rs 5,491 crore. PTI SUM DRR