November 19, 2010 / 4:37 AM / 7 years ago

Kotak cuts f'casts for SKS Microfinance, lifts rating

A customer of a micro finance institution strings beads into necklaces at a workshop in a slum area in Mumbai February 17, 2007.Prashanth Vishwanathan/Files

MUMBAI (Reuters) - Kotak Securities has lowered its earnings forecasts for SKS Microfinance for the next three financial years by 27, 28, and 23 percent respectively but upgraded its rating on the stock to buy, as the company has been beset by regulatory uncertainty.

Shares in SKS Microfinance fell as much as 20 percent on Thursday after it said a clampdown on business practices by lenders to the poor in the Indian state of Andhra Pradesh threatened to squeeze profits and revenue.

In its note dated Thursday, Kotak set a target price of 950 rupees for the stock. SKS shares were up 6.2 percent at 680.50 rupees early on Friday.

Reporting by Sowmya Kamath and Ami Shah

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