Bharat Financial overreacts

Bharat Financial presented its collections and disbursements status, post the demonetization. And if one takes the time to actually read through it, you will realise that despite the circumstances, it has actually done well.

The company has informed that as at 15^th December 2016, 98.6% of centers recorded full or partial collections v/s 95.8 as at 24^th November’16. Its collection efficiency has also gone up to 91.2% during demonetization period between 11^th Nov to 15^th Dec v/s 89.3% from 15^th Nov to 25^th Dec.  It has disbursed Rs.970 crore since demonetization.

Yet the stock figures out in the top three losers on the BSE currently, going down over 4% to Rs.578.40.

This illogical behavior has been explained very well by our Editor, Mr.SP Tulsian in the Market Whispers column. He has said, “Bharat Financial Inclusion has corrected largely due to technical factors,  as the stock was seen in an overbought zone and is now seeing long liquidations by the weak hands, on margin calls getting triggered. Stock has corrected due to concern on its Maharashtra exposure, where they have 10% exposure, while disbursement has fallen by about Rs. 100 crores in last one month, which were known and is largely factored in the share price now. Share seems to have bottomed out and positive statement from the company in respect to its business in recent times may see renewed buying and short covering as well.”

In Maharashtra, the total loan exposure is to the tune of Rs.1113 crore and in UP it is at Rs.794 crore.