The Indian rupee opened with a gain of 7 paise at 68.05 to the US dollar on Friday though benchmark indices BSE Sensex and NSE Nifty opened on a weak note amid Donald Trump taking oath as 45th president of the US and cautious mood prevailing ahead of Budget 2017. Axis Bank was the top Sensex loser.
The BSE Sensex was down 208 points at 27,100 while the NSE Nifty was trading at 8,375, down 61 points, at around 1.05 pm. The biggest Sensex loser was Axis Bank (down 5.59 percent to Rs 456) after declaration of Q3 results. India's third-largest private sector lender, Axis Bank had reported a fall of 73 percent in net profit to Rs 579.60 crore in the December 2016 quarter (Q3) as against Rs 2,175.3 crore in the corresponding period last fiscal.
Net interest income (NII) rose 4.1 percent to Rs 4,333.7 crore from Rs 4,162.1 crore. Net non-performing assets (NPAs) as a percentage of total advances rose sharply to 2.18 percent in Q3 as against 0.75 percent in the corresponding quarter in fiscal 2016.
The stock has a "sell" call, given its deteriorating performance. "We have a SELL rating on AXSB. We continue to expect weakness in core earnings, occasional improvements like the one in 'other income' during Q3FY17 notwithstanding," IDBI Capital Markets and Securities said in its analysis.
Other income for the bank rose 45 percent to Rs 3,400 crore in Q3.
Motilal Oswal Securities Ltd. (MOSL) has a "neutral" rating on Axis Bank. "Elevated slippages, weak outlook and expected pressure on core income are likely to keep return ratios under pressure," it said in its note.
Nirmal Bang Institutional Equities also flagged off concerns over the bank's asset quality problems. "Slippage in accounts outside the watch list stood at Rs16.3bn which was quite disappointing, raising doubts on the sanctity of the watch list. 51% of accounts under the watch list have already slipped over the past three quarters," the brokerage said.
The intra-day range for the Indian rupee is seen between 67.95-68.20 levels, according to a note by IFA Global on Friday.
