Bank of Baroda shares plunged almost 10 percent on Thursday on the Bombay Stock Exchange (BSE) after the company declared that it posted a sharp fall in its net profit for the first quarter (Q1) ended June 2016.
The stock fell 9.26 percent in early trade and was trading at Rs. 145.50 on the BSE at around 10.35 a.m. The share price of the bank had closed at Rs. 160.30 on Wednesday.
Bank of Baroda reported a 59.73 percent fall in Q1 net profit at Rs. 423.62 crore from Rs. 1,052.15 crore in the corresponding period last year. The sharp decline was due to an almost three-fold spike (234 percent) in provisioning for bad loans. The bank had to provide Rs. 2,004.07 crore towards bad loans in Q1 as compared to Rs. 599.74 crore, according to the regulatory filing by the bank to the BSE on Thursday.
Gross non-performing assets (NPAs) as a percentage of total advances almost tripled to 11.15 percent in Q1 from 4.13 percent in the corresponding quarter last year, while net NPAs stood at 5.73 percent (up from 2.07 percent).
Net interest income (NII) â€” the difference between interest earned and interest paid â€” dropped 2.55 percent to Rs. 3,371.09 crore in Q1 from Rs. 3,459 crore in the year-ago period.
Total income for Q1 also saw a fall to Rs. 11,877.91 crore from Rs. 12,243.72 crore for the quarter ended June 2015.
The results had an impact on the BSE Bankex as well, which was down 0.31 percent at 21,291.94. State Bank of India (SBI) shares were down 1.27 percent at Rs. 228.55. The bank will be declaring its results on Friday. Analysts expect volatility to persist on account of these factors.
"A majority of PSU banks are slated to declare their results today and tomorrow. State Bank of India will declare its results tomorrow in market hours which can lead to volatility in the markets," broker and financial adviser Dynamic Levels said in a note on Thursday.
Global factors would be influencing Indian stock markets going forward, said another analyst.
"In the absence of any specific data points it seems profit booking could be reason for the sharp fall in the market today. As the results season comes to end the Indian markets will now look forward for global developments and react accordingly," Angel Broking said in its Thursday pre-market opening note.
The BSE Sensex was up 18 points at 27,792, at around 10.51 a.m. Top index gainers were Adani Ports and TCS.