Equitas SFB Shares Hits 52W-High As Q2 PAT Jumps 70% To Rs 198 Crs

After reporting a net profit of Rs 198 Cr for the quarter ended September 30, 2023 compared to Q2FY23's PAT at Rs 116 Cr; marking a growth of 70% YoY, the shares of Equitas Small Finance Bank opened on the BSE at Rs 100.01 each and reached a 52-week high of Rs 101.85 during the morning deals on Friday. According to the bank, NII climbed by 26% YoY and 3% QoQ, while other income climbed by 40% YoY and 8% QoQ.

Compared to 3.07% in Q1FY24 and 5.79% in Q2FY23, it maintained consistent annualized gross slippages of 3.47% in Q2FY24. The bank said that it's NNPA improved by 102bps YoY to 0.91% in Q2FY24 as opposed to 1.93% in Q2FY23, and its GNPA climbed by 170bps YoY to 2.12% in Q2FY24 from 3.82% in Q2FY23. A significant 29% YoY rise of disbursements to Rs. 4,961 Cr was reported by the bank during the quarter under review.

In order to attain Rs. 30,839 Cr., the bank's deposits jumped by 42% YoY and 11% QoQ. In Q2FY24, the cost of funds climbed sequentially by 27bps to 7.21% from 6.94% in Q1FY24.

According to the bank, retail term deposits jumped by 58% YoY to Rs. 12,119 Crs., accounting for 59% of all term deposits and CASA ratio stood at 34%; term deposits grew 82% YoY to Rs. 20,490 Crs in Q2FY24. The bank said that its NIM decreased by 33 basis points to 8.43%, its Cost to Income decreased to 64.37% in Q2FY24 from 65.05% in Q1FY24 and 66.58% in Q2FY23, and its RoA and RoE plummeted to 2.03% and 14.62% respectively.

Mr. P N Vasudevan, Managing Director and CEO of Equitas Small Finance Bank said: "This Financial year is witnessing and continue to witness strong credit growth coupled with stable asset quality and a healthy growth in retail term deposits. CASA seems to be the area of concern for the Banking Industry.

For Equitas, the interest cost has risen to 7.21% for the quarter. With most of the old deposits at lower rates getting replaced with new deposits at higher rates, we expect further increase in the interest cost to moderate over the next two quarters. Our Investments in Technology/Digitization continue to progress effectively, benefits of which should be felt in the upcoming years."

One of the largest small finance banks in India is Equitas Small Finance Bank. The bank's net worth as of September 30, 2023, was Rs. 5,479 Cr.