Financials rally; Bharat Financials, Bajaj Finance, Muthoot Finance up 5%

Indian Bank, Kotak Mahindra Bank, PNG Housing and Capital First were up more than 5% each

Financial include micro-finance institutions (MFIs), non-banking financial companies (NBFCs) and select private and public sector banks rallied by up to 10% after reporting a better than expected October-December (Q3FY17) earnings.

Bharat Financial Inclusion (earlier SKS Microfinance), Indian Bank, Kotak Mahindra Bank, PNG Housing Finance, Muthoot Finance, Bajaj Finance, Capital First and Ujjivan Financial Services were up between 5% and 10% on the National Stock Exchange (NSE).

L&T Finance Holdings, Repco Home Finance, Shriram City Union Finance Equitas Holdings, Housing Development Finance Corporation (HDFC), Manappuram Finance, Dewan Housing Finance (DHFL) and LIC Housing Finance were up in the range of 2% to 4% on the NSE.

At 01:33 pm; the Nifty Financial Services, Nifty Private Bank and Nifty Bank index were up between 1% and 2% as compared to 0.83% rise in the benchmark Nifty 50 index.

Bharat Financial Inclusion has surged 13% to Rs 764 in intra-day trade after the company reported 80% increase in net profit at Rs 143 crore in Q3FY17 on back of increase in loan portfolio and minimum alternative tax (MAT) credit.

“The demonetization phase was characterized by cash crunch, disruption in day-to-day business and an atmosphere of loan waiver in few states. Despite such circumstances, Bharat Financial's reported performance was well above that of its peers,” said analysts at Anitque Stock Broking.

Demonetization has clearly put brakes to the dream run enjoyed by MFIs including BFIN. Currency shortage, disruption in day-to-day business and political interference impacted collections.

While there is week over week improvement, customer behavior needs to be monitored closely. Some losses will be inevitable. As per the current assessment, it could be in the range of 1.0% to 3.0% of the overall portfolio. Growth momentum will take a couple of quarters to come back, the brokerage firm said in a report.

Indian Bank has rallied to its 52-week high of Rs 279, up 8% after reporting a more than seven-fold jump in net profit at Rs 373 crore for the quarter ended December 2016 (Q3FY17) due to lower provisioning for bad loans. The state-owned bank had posted profit of Rs 48 crore during the same quarter last fiscal.

Kotak Mahindra Bank too surged 6% to Rs 787 after the private sector lender posted a better than expected 39% YoY growth in its standalone net profit at Rs 880 crore in Q3FY17. Net interest income grew 16% to Rs 2,050 crore, while net interest margin improved to 4.49% from 4.43% in Q3FY16. The assets quality improved sequentially with gross non-performing assets (NPA) as a percentage of gross advances stood at 2.42% in Q3 against 2.49% in Q2. Net NPA was at 1.07% against 1.20% in previous quarter.

COMPANY	LATEST	PREV CLOSE	GAIN(%)
PNB HOUSING	943.40	860.70	9.61
BHARAT FINANCIAL	742.50	678.35	9.46
MUTHOOT FINANCE	319.65	298.85	6.96
BAJAJ FIN.	983.95	929.75	5.83
CAPITAL FIRST	624.50	591.60	5.56
KOTAK MAH. BANK	784.10	743.35	5.48
INDIAN BANK	270.55	257.60	5.03
UJJIVAN FIN.SER.	365.50	350.50	4.28
IDBI BANK	79.20	76.35	3.73
SHRI.CITY UNION.	2069.75	1998.80	3.55
H D F C	1324.95	1280.75	3.45
IDFC BANK	65.55	63.65	2.99
YES BANK	1398.35	1358.90	2.90
I O B	26.10	25.40	2.76
MANAPPURAM FIN.	80.40	78.25	2.75
LIC HOUSING FIN.	540.85	526.35	2.75
L&T FIN.HOLDINGS	100.80	98.15	2.70
EQUITAS HOLDINGS	164.05	159.95	2.56
DEWAN HSG. FIN.	284.25	277.40	2.47
AXIS BANK	462.15	451.25	2.42