Stock Review: SKS Microfinance

The new ordinance has been more of a relief for SKS Microfinance. The stock was beaten out or shape and was totally out of people's radar. I think the last word on this regulation has not been said. It will be very difficult for any state government to actually give up on its turf.

We would expect some more issues of clarifications being sort on this regulation. Even though this regulation comes as it is being envisaged, one doesn't know how it pans out when it is executed on the ground.

The real problem occurs when you actually execute this microfinance business on the ground. Considering all this, people who had bottom fished and invested in this stock at lower levels might think of booking their profits.

For others, who might have been sitting on large losses; since they have nothing much to lose, they can continue to hold. There is no point in booking large losses. Microfinance as a sector is expected to do well. It might take a slightly longer time.