About the Company:
Third largest private sector bank that offers gross financial services in entire spectrum of customer segments covering MSME’s Corporates, Agriculture and Retail Business. The Bank has a spread of 3,882 domestic branches and 12,660 branches. The bank has achieved a steady growth along with a 5 year CAGR of 15%.
QoQ & YoY Performance:
India’s third largest private sector bank has declared the results for the second quarter of financial year ending March, 2020.
- Net Interest Income: NII (difference between interest earned and interest expended) that serve as a major factor for future prospects stood at Rs 623,136 lakhs slightly up by 4.37% QoQ while on YoY basis there is an increase of 16.84%.
- Net Profits: The bank has posted a net loss of 1,814 lakhs after-tax led by net deferred tax assets pertaining to previous years by 2,137.59 crores that have been charged against the Profit and loss account. QoQ has been fallen 101.44% while on a YoY basis, there is a sharp plunge of 102.07%.
- Provisions and Contingencies: Bank's provisions and contingencies surged by 5.18% QoQ and 43.44% in YoY.
- NPA (Gross): Gross NPA% has shown a downtick this quarter by 4.19% QoQ and 15.60% YoY.
- NPA (Net): Net NPA ratios are plunged by 2.45% QoQ and 21.65% YoY.
As per Lokesh Sethia, SEBI Registered Research Analyst, Net Interest Income has witnessed an uptick by 16.08%. No doubt, the provisions and contingencies have increased by 43.44% on YoY basis but still decent in comparison to the other private banks. The bank has posted a net loss of 1,814 lakhs after tax led by net deferred tax assets pertaining to previous years by 2,137.59 crores that have been charged against the Profit and loss account. At a P/E ratio of 37.59, the stock is trading at Rs. 713.25, similar to the Industry P/E ratio. We are expecting an upside to Rs. 900 in long-term horizon.