Equitas SFB Q2 Review - Second Consecutive Quarter Of Elevated Provisions Impact Bottom-Line: Nirmal Bang

Nirmal Bang Report

Equitas Small Finance Bank Ltd.'s Q2 FY25 net interest income/pre-provison operating profit/profit after tax came in at a variation of -3.6%/+10.1%/-93.2% versus our estimates.

Equitas SFB reported second consecutive quarter of higher provisioning expenses (up 421.6% YoY in Q2 FY25 versus 407.2% YoY in Q1 FY25) leading to a decline in PAT (down 93.5% YoY in Q2 FY25 versus down 86.5% YoY in Q1 FY25).

Net interest income growth for Q2 FY25 stood at Rs 8.0 billion (up 4.8% YoY and 0.1% QoQ); muted sequentially majorly on account of lower disbursements in higher yielding micro finance loans (down 32.5% YoY and 8.3% QoQ); thereby impacting margins as well (at 7.69% in Q2 FY25 versus 7.97% QoQ and 8.43% YoY).

Gross non-performing asset/net non-performing asset for the bank deteriorated further to 2.95%/0.97% in Q2 FY25 versus 2.73%/0.83% in Q1 FY25 respectively. The bank made Rs 1.46 billion additional provisions towards microfinance.

Click on the attachment to read the full report:

DISCLAIMER

This report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit.

Users have no license to copy, modify, or distribute the content without permission of the Original Owner.