(To be updated further. Last Update 24/7/2016)
The 2nd quarterly result (Q1FY17) from Equitas Holdings after going public has been declared . The company in Q1fy17 posted a 64% growth in its consolidated net profit for the quarter ended June 30, 2016. The first quarter results after the IPO (Q4Fy16) were also good. These results are in line with broad indications given by management at the time of IPO. Coming after strong results by SKS micro (Now Bharat Financial Inclusion) these are indicative of good tidings in MFI (Micro Finance ) sector.
Equitas revenue for Q1Fy17 was at Rs 348 crore as compared to Rs 239 crore (yoy) , up by 46 per cent. Provisions & Write Offs At Rs 17.6 Cr Vs Rs 14.6 Cr (QoQ); Vs Rs 16.4 Cr (YoY) : Calculated NII Up 52.2% At Rs 226.6 Cr Vs Rs 148.9 Cr (YoY). The assets under management as of June 2016 increased by 48 % to Rs 6,559 crore, as against Rs 4,419 crore year ago. The company has witnessed by healthy disbursements in all three key focus asset products i.e. micro-finance, used commercial vehicle finance and micro enterprise loans.
The Q1 Fy2017 results are summarised below
| Mar-15 | Jun-15 | Sep-15 | Dec-15 | Mar-16 | Jun-16 | |
| Sales | 210.9 | 238.89 | 263.07 | 289.4 | 319.59 | 348.11 |
| Expenses | 77.62 | 88.68 | 95.29 | 105.6 | 115.52 | 126.05 |
| Operating Profit | 133.28 | 150.21 | 167.78 | 183.8 | 204.07 | 222.06 |
| OPM | 63.2 | 62.88 | 63.78 | 63.51 | 63.85 | 63.79 |
| Other Income | 4.44 | 0.42 | 0.51 | 2.42 | 0.59 | 0.72 |
| Depreciation | 2.72 | 2.53 | 3.63 | 3.48 | 4.06 | 4.9 |
| Interest | 79.27 | 90 | 102.93 | 115.35 | 127.69 | 121.55 |
| Profit before tax | 55.73 | 58.09 | 61.73 | 67.4 | 72.91 | 96.34 |
| Tax | 19.25 | 20.71 | 21.8 | 24.34 | 26.13 | 35.17 |
| Net Profit | 36.48 | 37.38 | 39.93 | 43.05 | 46.77 | 61.17 |
| Net Profit Margin | 17.3 | 15.65 | 15.18 | 14.88 | 14.63 | 17.57 |
| Equity | 268.87 | 268.87 | 268.87 | 269.46 | 269.92 | 335.74 |
| EPS (Not annualised) | 1.36 | 1.39 | 1.49 | 1.6 | 1.73 | 1.82 |
Chennai-based Equitas Holdings has received the banking regulator’s final approval to launch a Small Finance Bank (SFB). The new SFB is expects to start operations by September or October.
P N Vasudevan, managing director, Equitas Holdings Ltd said, “We are planning to launch the Bank by September or October, this year.”He said, the SFB will be profitable from the first year onwards despite it will incur around Rs 100 crore additionally every year. Converting into a bank will involve some drag on financial resources of the company and this shall be visible in coming quarters, if not Q2 then Q3.
It is intended to publish a comparison of Equitas with other leading MFIs to get a better perspective in next post.
Revised Rating : JULY 23; The rating on Equitas Microfinance Ltd (EMFL)’s long-term bank facilities aggregating Rs. 1,000 crore and short-term debt instruments aggregating Rs. 327.50 crore have been revised to ‘A+’ from ‘A’ by Care Ratings. T he rating on companies sub-ordinated debt issue too has been revised to ‘A+’ from ‘A-’.
While Equitas results are good, further up move may be steady due to additional expenses on converting into a bank & rich valuations. While it may incur capital expenditure in setting up of Bank, however by virtue of the same, it will get easy and cheaper access to funds too. Buoyed sentiments about MFI sector and a reasonably good management may help to keep +ve sentiments on the stock. The company has high concentration in Tamilnadu (63%). NPA levels have remained comfortable during the quarter seeing only a small rise.
Related Posts : https://ipoandmore.com/2016/03/29/upcoming-ipo-equitas-holding/