Shares of two major Indian private lenders fell Oct. 19 despite higher year-over-year profit at both banks, as Axis Bank reported a narrower interest margin and HDFC Bank recorded lower treasury gains.
Axis Bank said profit after tax rose 38% from a year earlier to ₹7,003 crore for the quarter ended Sept. 30. Its net interest margin fell to 3.36% from 3.73% in the year-earlier quarter.
HDFC Bank reported standalone profit after tax of ₹195.1 billion, up 4.7% from a year earlier. Its treasury trading gains declined to ₹7.8 billion from ₹23.9 billion. The bank said profit excluding those gains rose about 12.6% year over year. The two banks’ results thus showed different pressures beneath their annual profit gains.
Axis Bank shares fell 4.19% to ₹1,236 on the National Stock Exchange of India (NSE), while HDFC Bank lost 2.31% to ₹712. The losses came amid a decline of more than 1% in Indian stock indexes. The Nifty 50 closed at 22,888.95, down 257.20 points, or 1.11%, and the Sensex finished at 73,852.90, down 876.37 points, or 1.17%.
The decline was uneven across banking shares. Nifty PSU Bank rose about 2.5% even as the two private lenders fell. Nifty IT lost 1.28%, adding to the weakness outside banking.
Siddhartha Khemka, head of research in wealth management at Motilal Oswal Financial Services, told Reuters he considered the selloff excessive because most banks other than Axis had met or exceeded earnings expectations. He also pointed to investors taking profits after the previous week’s rally. Reuters reported that the benchmarks had gained about 3% that week, their strongest advance in six months.
The NSE is scheduled to close Oct. 20 for Dussehra.
