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Financial stocks extend decline; ICICI, Axis Bank, 19 others hit 52-wk lows

The sudden economic stop caused by Covid-19 containment measures will lead to a global recession this year, bringing intense credit pressure, said S&P Global Ratings

SI Reporter  |  Mumbai 

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In the past one week, most of the frontline financial sector stocks have slipped in the range of 20 per cent to 40 per cent

Shares of financial companies including banks, non-banking finance companies (NBFCs), insurance and micro finance companies (MFCs) were reeling under pressure on Wednesday on expectation of slower growth amid (Covid-19) concerns.

ICICI Bank, IndusInd Bank, Axis Bank, DCB Bank, Bandhan Bank, Manappuram Finance, Equitas Holdings, Mahindra & Mahindra Financial Services, Max Financial Services and Ujjivan Financial Services were among the 21 stocks from the financial sector that hit their respective 52-week lows on the National Stock Exchange (NSE) today.

At 10:09 am, Nifty Bank, Nifty Fin Services and Nifty Private Bank indices were down nearly 3 per cent, as against a 1.4 per cent decline in the Nifty50 index. In the past one week, most of the frontline financial sector stocks have slipped in the range of 20 per cent to 40 per cent, as compared to a 15 per cent fall in the benchmark index.

“The sudden economic stop caused by Covid-19 containment measures will lead to a global recession this year, bringing intense credit pressure to bear on creditworthiness worldwide”, S&P Global Ratings said in a report.

S&P Global Ratings on Wednesday lowered India's economic growth forecast to 5.2 per cent from 5.7 per cent for 2020, saying the global economy is entering a recession amid the pandemic.

The timing of a recovery depends, most of all, on progress in containing viral spread. Even if major progress is made during the second quarter, after a sustained period of stressed cash flow many firms will be in no position to resume investing quickly, the agency said.

Households that have either lost their jobs or have worked fewer hours will spend less. Banks will be busy managing the deterioration in asset quality. There will be pent-up demand but the longer the crisis drags on, the weaker it will be, it added.

Given the events unfolding in the domestic financial system and outlook of slowing global growth, the analyst at JM Financial Institutional Securities expect slower growth for early financial year 2020-21 (FY21).

Among the individual stocks, IndusInd Bank hit a fresh multi-year low of Rs 550, down 9 per cent in the intra-day trade today, despite the private sector lender saying that it is financially strong, well-capitalised, profitable, and a growing entity with strong governance. The bank expects net non-performing assets (NPA) to drop below 1 per cent in March ended quarter. The stock has tanked 36 per cent in the past one week.

COMPANY LATEST ONE-WEEK BEFORE LOSS(%)
MAGMA FINCORP 21.05 34.30 -38.6
EQUITAS HOLDINGS 55.00 87.75 -37.3
BANDHAN BANK 245.00 376.45 -34.9
UJJIVAN FIN.SER. 204.15 302.80 -32.6
JM FINANCIAL 66.55 98.70 -32.6
L&T FIN.HOLDINGS 65.85 97.35 -32.4
TOUR. FIN. CORP. 37.20 54.25 -31.4
INDUSIND BANK 587.35 853.65 -31.2
MUTHOOT CAP.SERV 307.95 443.25 -30.5
MANAPPURAM FIN. 100.90 145.00 -30.4
CENTRUM CAPITAL 11.40 16.15 -29.4
EDELWEISS.FIN. 48.50 68.20 -28.9
I D F C 20.80 28.90 -28.0
M & M FIN. SERV. 233.20 323.85 -28.0
REPCO HOME FIN 188.70 257.65 -26.8
MAX FINANCIAL 369.75 501.60 -26.3
IDFC FIRST BANK 24.55 33.30 -26.3
AU SMALL FINANCE 772.15 1029.35 -25.0
CREDITACC. GRAM. 626.40 833.25 -24.8
SATIN CREDITCARE 117.10 155.65 -24.8
IIFL FINANCE 106.65 141.70 -24.7
AXIS BANK 467.60 618.75 -24.4
RBL BANK 172.20 226.65 -24.0
ADITYA BIRLA CAP 51.75 68.05 -24.0
SHRIRAM TRANS. 751.65 987.30 -23.9
DHANLAXMI BANK 8.95 11.70 -23.5
HDFC AMC 2239.15 2919.15 -23.3
SOUTH IND.BANK 6.08 7.92 -23.2
FEDERAL BANK 55.05 71.40 -22.9
ICICI BANK 360.50 465.40 -22.5
DEWAN HSG. FIN. 11.71 15.10 -22.5
MAH. SCOOTERS 2927.55 3767.95 -22.3
RELIGARE ENTERP. 24.40 31.35 -22.2
CHOLAMAN.INV.&FN 204.85 262.45 -22.0
ICICI PRU LIFE 317.25 404.70 -21.6
MUTHOOT FINANCE 655.20 834.70 -21.5
MOTIL.OSWAL.FIN. 569.65 723.85 -21.3
BF INVESTMENT 234.00 297.20 -21.3
SBI LIFE INSURAN 638.50 810.50 -21.2

First Published: Wed, March 18 2020. 10:32 IST
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