SKS Micro share in free fall on loss
George Soros-backed firm lost 19% value on Mon on top of 20% on Fri.business Updated: May 10, 2011 01:44 IST
SKS Microfinance share prices plunged 18.3% on Monday to hit an all-time low after it reported a loss of Rs 69.8 crore for the quarter-ended March 2011. It had a net profit of R62.9 crore in the same quarter last year.
Rating company Credit Suisse downgraded the micro-lender’s stock from outperform to underperform. JP Morgan has brought down its target price for the company to Rs 200 per share.
The company, which listed with strong subscription numbers and hit an all-time high of R1,490 per share last September, has fallen by 81% since then. It closed at Rs 270.8 at BSE on Monday.
The company’s market cap stands shrunken to Rs 1,957 crore against Rs 10,096 crore in September 2010.The microfinance sector has been reeling under pressure ever since the Andhra Pradesh government passed an ordinance in the wake of a spate of debt-driven suicides in the state. The government also clamped down on recovery practices of microfinance companies.
Experts feel that the SKS share prices will remain under pressure for some time.
“While the company did not come out with good numbers, the sector is a new one and is facing certain challenges which are leading to a downward pressure on the stock,” said Alex Mathew, head of research at Geojit BNP Paribas Financial Services.
“Investors can look to get into the stock but not now.”