5 Small Finance Bank Stocks Rally Up To 13%, 2 Of Them Touched New 52-Week High; Here's Why

Small finance bank stocks witnessed a huge rally of up to 13% on Thursday after their balance sheet performances for the September 2023 quarter of FY24. Utkarsh Small Finance Bank not only rose the highest among peers but also touched a new 52-week high, while Ujjivan Small Finance Bank had also clocked a new 1-year high. Other SFBs like AU Small Finance Bank, Equitas Small Finance Bank, and Suryoday Small Finance Bank also saw significant movement in their shares.

Suryoday Small Finance Bank:

The stock gained by as much as 6.33% with an intraday high of Rs 172.85 apiece on BSE.

As per the regulatory filing, in Q2FY24, this Maharashtra-based SFB reported 29% YoY and 9% QoQ growth in gross advances to Rs 6,921 crore, while total deposits stood at Rs 6,388 crore in the quarter, rising by 52% YoY and 12% QoQ respectively. Also, the SFB's disbursement stood at Rs 1,598 crore, up by 43% YoY and 34% QoQ.

Also, its asset quality improved impressively with gross NPA coming at 2.9% in Q2FY24 versus 9.9% in Q2FY23 and 3% in Q1FY24.

The SFB's management said the bank has witnessed substantial growth in all performance parameters, both sequentially as well as on a YoY basis. They added, that disbursements as of H1-FY'24 stood at Rs 2,787 crore as compared to Rs 2,130 crore in H1-FY'23 (YoY growth of 31%), on the back of an uptick in Vikas Loan as well as Retail Assets disbursements.

Also, the bank's cost of funds has increased by around 40 basis points in the quarter.

Equitas Small Finance Bank:

Equitas shares gained by at least 1.6% with an intraday high of Rs 92.79 apiece on BSE, compared to the previous day's print. Its advances and deposits both registered double-digit growth.

In Q2FY24, gross advances of the SFB were at Rs 31,231 crore, increasing by 37% YoY and 6% QoQ. While total deposits surged by 42% YoY and 11% QoQ to Rs 30,839 crore. CASA ratio stood at 34%, however, lower compared to a ratio of 38% in Q1FY24 and 48% in Q2FY23.

Cost of funds jumped to 7.21% in Q2FY24 as against 6.94% in Q1FY24 and 6.25% in Q2FY23.

Ujjivan Small Finance Bank:

Ujjivan SFB jumped to hit a new 52-week high of Rs 60.25 apiece in the early trade on BSE. So far, the upside is nearly 5% in the stock during the day.

Ujjivan is yet to announce its Q2 balance sheet performance.

AU Small Finance Bank:

The leading SFB climbed over 1.4% with an intraday high of Rs 713.95 apiece on BSE during Thursday's trade.

In the quarter under review, AU SFB's deposits soared by 30% YoY and 9% QoQ to Rs 75,743 crore. Gross advances, meanwhile, zoomed by 24% YoY and were marginally up 2% QoQ to Rs 65,029 crore.

AU's management said, "During Q2'FY24, domestic inflationary pressure was higher, and the monsoon progress remained below the historical average for the month of August. This, coupled with global macro, ensured that the interest rates remain elevated, and the systemic liquidity continued to remain tight. Amidst this backdrop, Bank once again delivered a stable quarter with growth seen across deposits and disbursements."

Despite higher competitive intensity for deposit mobilisation, the Bank grew its overall deposits by 9% sequentially and 30% YoY with CASA deposits growing by 6% QoQ. Also, its credit demand remains resilient with disbursement sustaining across products and the Bank continued to see an uptick in disbursement yields on a QoQ basis. Asset quality continues to follow the seasonal trend and remains within the range.

Utkarsh Small Finance Bank:

Utkarsh shares have rallied the most with nearly 13% upside and touched a new 52-week high of Rs 58.40 apiece on BSE.

Just like Ujjivan, Utkarsh SFB is also yet to announce its Q2 update. However, with double-digit growth in deposits and advances year-on-year in peers like AU SFB, Suryoday, and Equitas, optimism has also increased in these two stocks.