Jana Small Finance Bank shares rallied 19% to hit a new 52-week high of Rs 592.8 in Tuesday’s trade on BSE after the bank said it had doubled its March quarter net profit from ordinary activities to Rs 167 crore from Rs 81 crore in the year-ago period, backed by robust business expansion and lower credit cost.
The net profit, however, comes to Rs 344 crore, reflecting a four-fold jump, if the deferred tax assets of Rs 170 crore are included.
Its net interest margin, a key gauge of profitability, improved to 8% for the full year from 7.8% in FY23.
Its operating profit for the quarter was 22% higher year-on-year (YoY) at Rs 342 crore, on a total income of Rs 1,291 crore against Rs 1,010 crore earlier.
The bank’s assets under management expanded 25% YoY to Rs 24746 crore at the end of March with the secured portfolio rising to 60%.
“We worked on to de-risk the portfolio and intend to raise the share of the secured book to 80% in the next three years,” managing director Ajay Kanwal told ET.
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The bank’s gross non-performing assets ratio fell to 2% at the end of March from 3.6% a year back. Net NPA was 0.5% against 2.4%.
“We will need another year to become eligible to apply for a universal banking license,” Kanwal said. The Reserve Bank of India (RBI) said small finance banks need to have less than 3% gross NPA and less than 1% net NPA for two consecutive fiscals to become eligible for universal banking licenses.
The bank’s total deposits rose 38% YoY to Rs 22,571 crore at the end of March, with the share of low-cost current and savings accounts being at 20% of the total deposit.
At 11:03 am, the stock was trading 17% higher at Rs 584 on BSE. Since its IPO listing price of Rs 396 on February 14, the stock has surged nearly 50%.
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