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Federal Bank share price drops 6% despite rise in net profit

BusinessToday.In     October 16, 2019

Shares of Federal Bank dropped over 6% as compared to the previous close of Rs 84.50 on the Bombay Stock Exchange, despite the private lender reporting a year-on-year (YoY) jump of 51.58% in its consolidated net profit to Rs 425.34 crore on Wednesday.

Federal Bank shares rose 2.71% to Rs 86.8 in early trade. Although post the earnings release, the stock price slipped in the red and fell 6.4% to intraday low of Rs 79.05 on the BSE, against the previous closing of Rs 84.50. The stock price traded merely 2.65 points higher than the 52-week low of Rs 76.40, recorded on October 16, 2018.

Overall, 36.83 lakh and 623.25 lakh shares traded on the counter of BSE and NSE, respectively. Volume traded on both the bourses was higher than the 5, 10 and 30-day average volume traded. Federal Bank's share value trades lower than 5, 20, 50, 100 and 200-day moving averages.

Market depth data on the BSE depicted only 10% bidders buying the stock compared to 90% sellers offering the stock. The stock has lost 12% value year-to-date, declined over 4% in a month and nearly 5% in the last week.

Helped by higher interest income and lower tax cost, the lender's consolidated net profit recorded at Rs 425.34 crore, 55% higher than Rs 266.04 crore earned during the same period a year ago.

The bank's net interest income, the difference between interest earned and interest expended, grew by 12.47% year-on-year to Rs 1,182 crore over Rs 1,051.84 crore recorded in Q2FY19.

Lender's gross non-performing assets (NPA) declined marginally to 3.07% and net NPAs fell to 1.59% of net advances on yearly basis, as of September 30, 2019.

Federal Bank shares ended 2.78% lower at Rs 82.15 on the BSE.

By Rupa Burman Roy

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