Benchmark indices opened in the green as they extended gains to the third session in a row. Strong global cues and steady foreign flows kept the markets higher.
The Nifty 50 was at 18000 levels, while the Sensex was at 60740 levels. However, two stocks took a downturn as they missed expectations in terms of their quarterly numbers (Q2FY23). However, brokerages see an upside in these stocks.
Bandhan Bank
The shares of Bandhan Bank plummeted 11.84 per cent to reach an intraday low of ₹ 237.25 on the National Stock Exchange (NSE). This happened after the bank missed profit estimates.
The private sector lender posted a net profit of ₹ 209 crores for the September quarter (Q2FY23) against a loss of ₹ 3,008 crores a year ago, far below analyst expectations. Analysts had expected a net profit of ₹ 749.8 crores according to a CNBC-TV 18 poll.
Bandhan Bank’s net income grew 13.3 per cent year-on-year to ₹ 2,193 crores and its net interest margin (NIM) slipped 100 basis points quarter-on-quarter to seven per cent from eight per cent. However, its asset quality showed very little improvement. Its gross net performing assets were at 7.2 per cent versus 7.3 per cent a quarter ago and net NPA was flat at 1.9 per cent.
Analysts expect credit costs to remain high at 5.3 percent as against 2.7 percent in the June quarter this year, due to slippages during the quarter in review at ₹ 3,954 crore.
Credit Suisse has trimmed the target price on the stock to ₹ 330 from ₹ 360. It expects credit costs to moderate in the second half of this fiscal but has cut FY23-25 EPS estimates by 9-19 per cent. The revised target suggests an upside of 37 percent as compared to its current share price of ₹ 241.00.
Gland Pharma
Another company, Gland Pharma shares have declined by 6.50 per cent on Monday’s intraday trades. Its share price has been 1680 apiece on the National Stock Exchange (NSE).
The company’s shares have been reeling under pressure in the past few days after it reported weak quarterly numbers. In addition, FIIs have also decreased their holdings in the company since September 2022.
Gland pharma reported a 20 percent decline in consolidated net profit at ₹241 crore for the second quarter ended September (Q2FY23) due to lower sales and higher expenses. Its revenue from its core markets of US, Europe, Canada and Australia grew by 3 percent, however, India’s revenue was down 42 percent. The company’s shares are down 55 percentas per year-to-date data (YTD), as compared to a 1.91 percent rise in the Nifty 50 during the same period.
Axis Securities has a ‘hold’ call on the shares of Gland Pharma with a target price of ₹ 2100. This implies an upside of 20 percent as compared to its current share price of ₹ 1748.00.
Written by Simran Bafna
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