Dhanlaxmi Bank shares tank 13% post Q2 results despite stable asset quality, lower provisions

Shares of Dhanlaxmi Bank Ltd. fell as much as 13% on Monday, October 26, after the lender reported its numbers for the second quarter.

The stock fell despite asset quality being stable on a sequential basis and its provisions also declined.

Dhanlaxmi Bank's net profit more than doubled during the September quarter to ₹48.3 crore from ₹23.2 crore in the September quarter last year. The growth in profitability was also aided by a jump in other income, which grew to ₹47.4 crore from ₹34.5 crore last year.

Net Interest Income, or core income earned by the lender increased by 32.6% on a year-on-year basis to ₹187.7 crore from ₹142 crore last year.

The lender's asset quality improved sequentially.

Its gross non-performing assets (NPA) improved to 1.76% from 1.82% in the previous quarter. Meanwhile, its net NPA declined marginally to 0.45% from 0.47% in the quarter-ago period.

The bank's provisions declined 64.2% to ₹6 crore in the second quarter from ₹16 crore in the first quarter of this fiscal.



Shares of Dhanlaxmi Bank are currently trading 14% lower after the results announcement at ₹30.84. The stock, as a result of this fall, has trimmed its year-to-date gains to 23%.

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