Shares of India’s second-largest mortgage lender declined 9% on the NSE to close at ₹364.55. More than 37.5 million shares exchanged hands on the BSE and NSE compared with a combined average daily volume of 2.4 million shares in the previous month.
CLSA cuts its 12-month price forecast to ₹480 per share from ₹515 earlier.
The stock tanked nearly 13% at one point in Wednesday’s trading as traders cut bullish bets after the mortgage lender reported a lower-than-expected 23% growth in net profit but saw an 80 basis points drop in net interest income and a steep rise in provisions.
The stock was the top loser in the BSE 500 universe. Of the 33 analysts tracking the stock, only four of them updated their view post its second-quarter earnings.
“Large miss in a quarter supposed to be strong for HFCs,” said Morgan Stanley in a client note. The US investment banking retained its underweight rating on the stock and target price of ₹375. It prefers
as its top pick from the housing finance space.
“It appears to us that there has been a significant sacrifice in interest income by way of repricing terms favourable to customers, potentially to retain customers. We await management commentary on movement in loan yields and borrowing costs, however, and the high net loss on derecognition of financial instruments,” said Morgan Stanley.
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