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Business News/ Markets / Stock Markets/  ESAF SFB stock slides over 16% even after net profit surges 200% YoY; here's why
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ESAF SFB stock slides over 16% even after net profit surges 200% YoY; here's why

ESAF Small Finance Bank's shares plummeted 16.35% to an all-time low of ₹65.45 per share, the biggest intraday drop since its listing in November 2023. Investor sentiment was affected by the bank's deteriorating asset quality in Q3 on a QoQ basis.

ESAF Small Finance Bank's net profit decreased by 20% quarter-on-quarter, but surged by 200% year-on-year. (Equitypandit)Premium
ESAF Small Finance Bank's net profit decreased by 20% quarter-on-quarter, but surged by 200% year-on-year. (Equitypandit)

ESAF Small Finance Bank witnessed a sharp decline of 16.35%, hitting an all-time low of 65.45 per share in today's trading session, marking its most significant intraday drop since its listing in November last year.

Investor sentiment soured as the bank's asset quality deteriorated quarter-on-quarter in Q3. Its Gross Non-Performing Assets (GNPA) ratio rose to 4.16%, up from 2.64% in Q2FY24, although it showed improvement from 7.24% in Q3 FY23.

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Similarly, the Net Non-Performing Assets (NNPA) ratio increased to 2.19% from 1.19% in Q2FY24 but was lower compared to 3.73% in Q3FY23. Provisions surged to 137.8 crore in Q3 from 101.4 crore in the preceding quarter, representing a QoQ gain of 36.7%.

The bank's operating expenses soared by 46.4% year-on-year to 429.3 crore, primarily driven by a substantial 54.1% increase in other expenses to 327.1 crore. These heightened expenses, coupled with increased provisions, impacted the bank's profitability, resulting in a net profit of 112.1 crore, a 20% decrease quarter-on-quarter.

However, on a YoY basis, the net profit surged sharply by 200%. On the operational front, Net Interest Income (NII) witnessed a growth of 32.3% year-on-year to 597 crore compared to 451 crore in Q3 FY23, and NIM stood at 10.6%.

Looking at it sequentially, the NII came in flat, and the NIM dropped by 40 basis points. The bank's cost of funds increased to 7.3% in Q3 FY24 from 6.2% in the corresponding period last year.

Also Read: 3.35 to 25.35: Small-cap stock under 50 rallies 650% in four years

ESAF Small Finance Bank (ESFB), a scheduled commercial bank, commenced its operations on March 10, 2017. The company made its debut on Dalal Street on November 10, 2023, listing at a premium of 15.1% at 69 per share compared to the issue price of 60 per share.

The company raised 390 crore via the IPO, employing a mix of fresh equity share issuance and an offer-for-sale (OFS) component.

 

Disclaimer: We advise investors to check with certified experts before taking any investment decisions.

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Published: 09 Feb 2024, 03:47 PM IST
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