Satin Creditcare Network hits a 5 per cent upper circuit; heres why!

With the relaxation of the lockdown restrictions as well as improvement in disbursement and collection efficiency, the company has reported a PAT of Rs 21 crore in FY22 as compared to the loss of Rs 14 crore in FY21

During Thursday’s early market hours, Satin Creditcare got locked at a 5 per cent upper circuit at Rs 122.10 per share. The company has reported strong financial results for the quarter and year ended March 31, 2022.   

Satin Creditcare Network Limited is a leading microfinance institution (MFI) in the country with a presence in 23 states & union territories and around 90,000 villages. The company’s mission is to be a leading micro-financial institution by providing a comprehensive range of products & services for the financially underserved community. The company also offers a bouquet of financial products in the non‐MFI segment comprising loans to MSMEs, a housing finance subsidiary, business correspondent services along with similar services to other financial institutions.  

Disbursements for the quarter stood at Rs 1,900 crore as compared to Rs 2,376 crore in Q4FY21 and Rs 1,348 crore in Q3FY22, registering a sequential growth of 41 per cent. During FY22, its disbursement stood at Rs 4,856 crore as compared to Rs 4,982 crore in FY21.  

With the relaxation of the lockdown restrictions as well as improvement in disbursement and collection efficiency, the company has reported a PAT of Rs 21 crore in FY22 as compared to the loss of Rs 14 crore in FY21.   

During FY22, the company raised debt of Rs 4,093 crore including direct assignment transactions of Rs 891 crore. Satin Creditcare continues to maintain healthy balance sheet liquidity with Rs 1,291 crore of surplus funds and has undrawn sanctions worth Rs 269 crore as of March 31, 2022.   

The debt-to-equity ratio for the March quarter stood at 3.7. The company’s reliance on NBFC funding is a mere 5 per cent of the total borrowings and has significantly reduced its reliance on the higher cost of funding. Around 63 per cent of its borrowings are from banks.   

In a statement issued by Satin Creditcare, the company states, “Continuing a cautious and calibrated approach in disbursement activities, we are gradually inching towards the pre-COVID levels and have only disbursed loans to clients with regular repayment cycles as well as healthy credit history. No disbursement was made to delinquent clients.”  

Meanwhile, HP Singh, Chairman & Managing Director of the company added, “During Q4FY22, we saw significant recovery across sectors, and micro-finance, being a core part of this ecosystem, was a beneficiary of this positive momentum. Our AUM for the quarter and year ended March 31, 2022, stood at Rs 7,617 crore. We have also demonstrated an improving trend in our portfolio quality. Our GNPA for March 2022 stood at 8.0 per cent. We have made adequate provisioning of 6.7 per cent as of March 31, 2022, of on-book portfolio.” 

He further said, “Going ahead, we intend to re-establish our growth trajectory and recoup the lost ground. We remain sanguine about the overall economy and lending activity, especially in the micro-finance segment. We are getting positive feedback from our on-ground force for the enquiry generation, which we hope will drive the growth in disbursements. The asset quality is expected to improve, underpinned by the robust rebound in economic activities.” 

Watch out for the scrip of Satin Creditcare Network for more action in the upcoming trading sessions!