Utkarsh Small Finance Bank Ltd Share Price – NSE /  BSE

Banks, Small Cap

However, the banks total income jumped 26.47% YoY to Rs 1,089.54 crore in the quarter ended 30 September 2024.

Profit before tax for Q2 FY25 stood at Rs 68.07 crore, registering a 55.92% decline compared to Rs 154.43 crore reported in the corresponding period of previous year.

In Q2 FY25, Net interest income stood at Rs 558 crore, up 26% as against Rs 442 crore posted in Q2 FY24. Net interest margin (NIM) reduced to 8.80% in the September quarter as compared to 9.20% recorded in Q2 FY24.

Deposits grew by 40% YoY to Rs 19,496 crore in Q2 FY25 led by growth in retail term deposits. The Bank continues to focus on building granular liabilities franchise, Bank’s retail term deposits grew by 47.6% YoY to Rs 9,518 crore.

On asset quality front, the bank's gross non-performing assets (GNPA) stood at 718.74 crore as on 30 September 2024 as against Rs 403.53 crore as on 30 September 2023, registering growth of 78.11% YoY.

The bank’s Net Non-Performing Assets (NNPA) soared to Rs 159.97 crore as on 30 September 2024 as against Rs 21.64 crore as on 30 September 2023.

Gross NPA ratio rose to 3.88% in Q2 FY25 as against 2.81% in Q2 FY24. Net NPA ratio increased to 0.89% in Q2 FY25 as compared to 0.16% registered in Q2 FY24.

During the quarter, the bank’s loan Portfolio grew by 28.3% YoY to Rs 19,101 crore, Additionally, the share of secured loans in overall portfolio increased to 38% as on 30 September 2024 from 35% as on 30 June 2024 and 34% as on 31 March 2024.

The bank’s operating profit (pre-provisions) of Rs 276 crore in Q2 FY25, registering growth of 15.96% from Rs 238 crore in Q2 FY24.

The Bank’s CD ratio declined to 93% as on 30 September 2024 as against 101% as on 30 September 2023.

During the quarter, CRAR stood at 22.43% and Tier 1 capital stood at 2,892 crore.

Return on assets and return on equity stood at 0.8% & 6.6% respectively for Q2 FY25. The cost-income ratio was 58.2% during Q2 FY25.

As of 30 June 2024, the provision coverage ratio, including floating provisions, was 91%. In addition to provisions made in accordance with RBI IRAC norms, the bank has consistently created floating provisions. These floating provisions amounted to Rs 169 crore as of 30 June 2024, compared to Rs 106 crore as of 30 June 2023.

As on 30 September 2024, the provision coverage ratio, including floating provision, was 78%. In addition to provision in accordance with RBI IRAC norms, the Bank has created floating provision which stood at Rs 190 crore as on 30 September 2024 as compared to Rs 169 crore as on 30 June 2024, compared to Rs 149 crore as on 31 March 2024.

Govind Singh, MD and CEO, Utkarsh Small Finance Bank said, “Q2, FY25 has been a challenging quarter for microfinance sector wherein collection efficiency and disbursements, both, were significantly impacted on account stress which started from heatwave & operating limitations during general elections in Q1, FY25 to higher borrower level leverage and credit supply tightening for underlying micro-banking borrowers on account implementation of MFIN guard rail norms and general slowdown in disbursement by the micro finance sector.

We continue to work on strengthening our collection efforts further to improve collection efficiency. On the positive side, we continue to witness healthy growth in non-microbanking loan portfolio and consistent increase in share of secured loan portfolio. We have also been able to optimize our disbursements yields in secured lending by 50-80 bps for housing and MSME portfolio.

Our deposits have also grown by a healthy pace of 40% YoY, deposits growth was led by retail term deposits growth. We are expanding our franchise, and opened 79 new branches during H1FY25 and 51 in Q2FY25, and have a total branch network of 967 branches, spread across 26 states & UTs of the country, as on 30 September 2024”.

Utkarsh Small Finance Bank is engaged in providing banking and financial services with a focus on providing financial services to the underserved and unserved sections. The bank's microfinance lending activities are primarily focused in rural and semi-urban locations of the country while its other services are spread across the country.

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Net profit of Utkarsh Small Finance Bank declined 55.09% to Rs 51.39 crore in the quarter ended September 2024 as against Rs 114.42 crore during the previous quarter ended September 2023. Total Operating Income rose 30.49% to Rs 986.95 crore in the quarter ended September 2024 as against Rs 756.32 crore during the previous quarter ended September 2023.

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Utkarsh Small Finance Bank will hold a meeting of the Board of Directors of the Company on 9 November 2024

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CARE Ratings stated that the rating assigned to Utkarsh Small Finance Bank (USFBL) continues to derive strength from its comfortable capitalisation levels through regular equity infusions with the latest round of equity infusion coming through initial public offer (IPO) of Rs 500 crore in July 2023 supported by accretion of profits and sustainable growth in scale of operations with comfortable asset quality.

The rating also factors in the stable profitability as the bank reported a profit after tax (PAT) of Rs 498 crore in FY24 (refers to April 01 to March 31) against Rs 405 crore in FY23 resulting in return on total asset (ROTA) of 2.32% in FY24 against 2.38% in FY23.

However, the rating continues to be constrained by geographic concentration in advances wherein top two states contribute 54% and product concentration with high exposure to micro-banking segment, exposing it to inherent risk of the microfinance sector.

Over the years, the bank has diversified its non-microbanking retail portfolio, leading to a steady improvement in its proportion of the overall loan portfolio.

While the bank has been able to grow its deposit base in recent years, the current account savings account (CASA) ratio continues to be relatively low with a CASA of 19.01% as on 30 June 2024.

Utkarsh Small Finance Bank is engaged in providing banking and financial services with a focus on providing financial services to the underserved and unserved sections. The bank's microfinance lending activities are primarily focused in rural and semi-urban locations of the country while its other services are spread across the country.

The bank's standalone net profit jumped 27.81% to Rs 137.39 crore in Q1 FY25 as against Rs 107.49 crore recorded in Q1 FY24.Total income stood at Rs 1,070.56 crore in Q1 FY25, registering a growth of 31.78% from Rs 812.39 crore reported in the corresponding quarter previous year.

The scrip had gained 2.03% to end at Rs 42.28 on the BSE during yesterday's Mahurat trading session.

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