Dena Bank tanks nearly 5% as Q4 net halves to Rs 125 crore

NEW DELHI: Dena Bank slipped nearly 5 per cent in opening trade in Monday, after the public sector lender reported a massive 50.7 per cent decline in net profit to Rs 125.7 crore in the fourth quarter of last fiscal in the wake of higher provisions.

At 09:30 a.m.; the stock recouped some of its morning losses and was trading 3.4 per cent lower at Rs 90.55. It hit a low of Rs 89.50 and a high of Rs 91 in trade today.

Tracking the momentum, Ashwani Gujral of ashwanigujral.com has recommended investors to ‘sell’ the stock for a target of Rs 85, keeping a stop placed at Rs 93.

Total income during the quarter rose 17.24 per cent to Rs 2,539.74 crore against Rs 2,166.36 crore in the corresponding period last year.

During 4QFY2013, Dena Bank posted a moderate operating performance, with operating income and operating profit decline of 1.4 per cent and 15.7 per cent YoY, respectively.

“The bank faced asset quality pressures during the quarter (as their gross and Net NPA on an absolute basis increased by 10.3% and 12.3% QoQ, respectively) and consequently their provisioning expenses increased by 17.5 per cent YoY,” Angel Broking said in a report.

“Due to higher provisioning expenses and moderate operating performance, the bank reported a PAT decline of 50.7 per cent YoY to Rs 126cr,” said the report.

The brokerage firm recommends ‘Neutral’ rating on the stock.