2021 was a nightmare for many banks and pharmaceutical stocks; RBL Bank, Bandhan Bank, Strides Pharma saw sharp losses this year

Bengaluru-based small finance bank offers banking services like home loans, business, personal and vehicle loans. Shares of the bank have been under pressure the entire year as widening losses, sharp rise in non-performing assets (NPAs) and top level resignations over differences in provisioning against bad loans haunted investors.

As a result, the company widened its losses to ₹273 crore in September quarter from ₹233 crore in the previous quarter.

The parent company Ujjivan Financial Services stock was another company with a big loss of 52% in 2021.

Dhani Services is a ‘buy now, pay later’ online medicine home delivery service platform. Dhani Services, formerly known as Indiabulls Ventures, changed its name in 2020 and has attracted some negative publicity in the last one year.

In April, many non-users of Dhani application were shocked to receive messages to repay a loan they never took. After people took it to social media, the company apologised for the inconvenience. In May 2021, India’s market regulator had put a fine of ₹1.05 crore on the company, former executive director and her husband and its company secretary for violating insider trading norms.

Moreover, the company recorded a loss of ₹228 crore in the September quarter.

The Bengaluru-based pharmaceutical company’s stock has been getting a lot of heat in the last one year on account of poor financial performance. The company made a loss of ₹167 crore in September quarter as compared to ₹208 crore in the previous quarter.

It reportedly faced continued headwinds in its US business along with a drop in demand after the pandemic on account of low prescriptions, high logistics costs and pricing pressures. However, the company hopes to witness improvement in the US operation from the third quarter of FY22.

Shares of RBL Bank have been in a downtrend because of a mini crisis that has raised concerns over the bank’s financial performance.

The stock has lost 28% of its value in the last one month as investors started fretting after the company’s long term chief executive officer (CEO) and managing director (MD), Vishwavir Ahuja, went on a sudden leave, signalling deeper issues at the bank. At the same time, RBI appointed an additional director on the board.

A report by Mint said that the key reason behind the fiasco is that the lender’s write-off a ₹300 crore loan within seven months of being sanctioned. The final verdict on the issue is yet to come out, so some uncertainty may still prevail.

Bandhan Bank was another wealth destroyer this year on account of weak earnings led by poor quality of loan book. The lender had reported a net loss of ₹3,008 crore in the September quarter as against a net profit of ₹920 crore in the same quarter previous year. The loss was on account of huge provisions of over ₹4,600 crore.

IOL Chemicals is an active pharmaceutical ingredients (API) player and is into the speciality chemicals market. Similar to Strides Pharma Science, the company is also seeing a decline in demand for APIs and facing volatility in raw material prices of chemical products.

All these impacted on the company’s financial performance as its profits more than halved in September quarter to ₹30 crore from ₹67 crore in the previous quarter.

Shares of Spandana Sphoorty Financial have been falling due to tussle amongst management and promoters. Managing Director Padmaja G Reddy had resigned from the microfinance lender following disagreement with private equity investor Kedaara Capital.

Things got worse when the company delayed its September quarter results and has still not released its earnings due to issues among management and attrition in the information technology team. Further, the company is supposed to meet on January 5, 2022 to approve the financial results of the second quarter.

Shares of one of India’s leading retailers lost almost 40% of its value in the last one year as the company reeled in losses as a result of the pandemic-induced lockdown. Its losses in the September quarter stood at ₹1,116 crore, a little less than ₹1,147 crore in the previous quarter.

Moreover, constant court hearings of Future Retail’s legal fight with Amazon have been keeping the stock under pressure. Amazon and Future have been locked in a bitter legal tussle after the US e-commerce giant dragged Future Group to arbitration at Singapore International Arbitration Centre (SIAC) in October last year, arguing that Future Retail had violated their contract by entering into the deal with rival Reliance.

The Bengaluru-based pharma company is a subsidiary of parent AstraZeneca Plc, UK. Its products in the healthcare segment includes drugs for cardiovascular, oncology, respiratory, renal and metabolic diseases.

The stock has been on a downward trend on fall in its profitability. In the July-September quarter, AstraZeneca Pharma India reported a decline of 54% in net profit to ₹11 crore as compared to ₹26 crore last year.