Mumbai: Ujjivan Financial Services Ltd on Thursday said profit for the third quarter ended 31 December dropped 9.54% from a year ago because of an increase in provisions.
Net profit fell to Rs43.94 crore in the three months ended 31 December from Rs48.57 crore in the same period a year earlier.
The microfinance industry has been hit severely by the government’s demonetisation drive, which led to a drop in both disbursements as well as collections.
Provisions and contingencies increased to Rs54.74 crore at the end of December quarter from Rs6.95 crore in the September quarter.
However, net interest income (NII) in the December quarter rose 44% to Rs199 crore from a year ago.
“Ujjivan internally took a conservative call on provisioning; after four to six months, we will get an idea of how much portfolio turns into non-performing assets,” said Sudha Suresh, chief financial officer.
Cost-to-income ratio for the December quarter stood at 49.33% compared to 49.01% in the second quarter ended September.
This compared with 48.18% in the year-ago quarter.
Shares in Ujjivan lost 2.9% to close at Rs352.10 on Thursday on the BSE, while the benchmark Sensex gained 0.19% to close at 27,308.60 points.