Stock under Rs 30: This small finance bank reports its highest ever quarterly net profit; stocks jump over 5 per cent!

On Monday, the sector remains the same but the stock which has pleasantly surprised is a small finance bank.

The Q2FY23 earning is at its peak and many companies have delivered their result in the last couple of weeks. The companies whose earnings have surpassed analysts’ expectation, have seen a good upsurge in its stock price and have been the talk of the town as a rerating candidate. For instance, India’s leading public sector bank pleasantly surprised everyone with its mind-boggling earnings over the weekend.   

On Monday, the sector remains the same but the stock which has pleasantly surprised is a small finance bank. The name of the stock is Ujjivan Small Finance Bank. Post the announcement of earnings, the stock has roared like a lion and has surged over 12 per cent and marked its fresh 52-week high.   

Summary of Ujjivan Small Finance Bank Business Performance – Q2 FY 2022-23   

• Gross advances at Rs 20,938* crore up 44 per cent Y-o-Y and 8 per cent Q-o-Q   
• Strong disbursements for Q2 – Rs 4,866 crore up 56 per cent Y-o-Y   
• As of September 30, 22, total provision on books are at Rs 1,126 crore – Rs 115 crore standard provision, Rs 762 crore account level NPA provision and Rs 250 crore floating provision. Entire Floating provision of Rs 250# crore created in Jun’21 continues to be there on books and can be utilized for making specific provisions in extraordinary circumstances, with prior approval of RBI; only Rs 160 crore is utilized for NNPA/ PCR calculation, Rs 30 crore towards Tier II capital and the balance Rs 60 crore has been grouped as part of other provisions without utilizing the same towards Tier II capital, this amount continues to be earmarked for utilization for NNPA/PCR as and when needed.   
• Continued traction on Collections side at 100 per cent in Sep’22   
• Portfolio at risk continues to decline; 6.1 per cent as of Sep’22* vs 7.9 per cent as on Jun’22  
• GNPA/ NNPA declined to 4.4 per cent / 0.04 per cent #* as of Sep’22 against 5.9 per cent / 0.1 per cent #* respectively as of Jun’22; total of Rs 157 crore written-off in Q2FY23; Provision coverage ratio as on Sep’22 is 99 per cent #   
• Substantial reduction in restructured book; constitutes 2.3 per cent of gross advances* with provision cover of 63 per cent  
• Deposits at Rs 20,396 crore as of Sep’22 up by 45 per cent Y-o-Y; Retail deposits at 61 per cent of total deposits against 52 per cent as of Sep’21; CASA ratio at 26.9 per cent in Sep’22 vs 22.5% in Sep’21. Retail banking CASA grew 79 per cent Y-o-Y contributing 79 per cent to total CASA; healthy retail liability customer acquisition.   
• Net Interest Income of Rs 663 crore in Q2FY23; Net interest margin at 9.8 per cent * in Q2FY23 against 8.1 per cent in Q2FY22  
• Operating expenses to average assets at 6.6 per cent; Cost to Income ratio at 52.5 per cent in Q2FY23 vs 82.3 per cent in Q2FY22   
• PPoP at Rs 385 crore vs Rs 79 crore in Q2FY22; PAT of Rs 294 crore vs Rs (274) crore Y-o-Y   
• Capital adequacy ratio at 26.70 per cent with Tier-1 capital at 23.37 per cent; Liquidity coverage ratio*** at 219 per cent as of Sep’22