Axis Bank shares decline nearly 5% after lender's first quarter earnings fail to cheer investors

New Delhi: Shares of Axis Bank dropped nearly 5 percent on Wednesday as the company’s first quarter earnings failed to cheer investors.

The scrip declined 4.55 percent to close at Rs 674.40 on the BSE. During the day, it tumbled 6.92 percent to Rs 657.65.

The stock was worst hit among the BSE’s 30-share key index frontline companies.

On the NSE, the shares dropped 4.63 percent to close at Rs 674.80.

“Earnings were qualitatively soft with some disappointment in asset quality and softer core revenue momentum,” according to a report by Edelweiss Research on Axis Bank.

The bank on Tuesday reported a 95.4 percent jump in standalone net profit at Rs 1,370.08 crore for the first quarter of 2019-20, aided by a healthy rise in income.

It had posted a net profit of Rs 701.09 crore in the April-June quarter of the previous fiscal year.

There was an uptick in provisioning for bad loans and contingencies at Rs 3,814.58 crore for April-June 2019-20 as against Rs 3,337.70 crore in the year-ago period.

Total income (standalone) rose to Rs 19,123.71 crore for the June quarter of 2019-20 from Rs 15,702.01 crore in the year-ago period, Axis Bank said in a regulatory filing.

The asset quality showed improvement with gross non-performing assets (NPAs) standing at 5.25 percent of the gross advances as on 30 June 2019, down from 6.52 percent as on 30 June 2018.

Net non-performing assets (NPAs) or bad loans were at 2.04 percent, down from 3.09 percent a year ago.