SKS Microfinance removed from BSE A group

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SKS Microfinance has hit yet another lower circuit of 5% on the fourth consecutive day.

The stock, which is currently trading at Rs 222 was, shifted from the elite A group to B group by the Bombay Stock Exchange (BSE) with effect from October 10, 2011. According to media reports, the microfinance sector in the country has shrunk by about 40% in past one year after the crisis began to unfold in Andhra Pradesh.

Analysts expect SKS, which posted a loss of Rs 219-crore for the quarter ended June 30, 2011, due to losses in Andhra Pradesh to announce further write-offs in its Andhra Pradesh portfolio for the second quarter ended September 30, 2011.

In May this year JP Morgan downgraded SKS Microfinance and suggested a price target of Rs. 200 due to poor business outlook.

The stock has severly underperformed and is down more than 80% in last 1 year.

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