Equitas Small Finance Bank Q4 Results Analysis

Introduction

Equitas Small Finance Bank recently announced its Q4 results, which have garnered a lot of attention from investors and market watchers alike. In this article, we provide an in-depth analysis of the results, along with our recommendations and insights on whether investors should buy, sell, or hold the stock.

Financial Performance

Equitas Small Finance Bank reported a net profit of Rs. 130 crore in Q4, up by 21% YoY. The bank’s net interest income also grew by 18% YoY to Rs. 389 crore, while its net interest margin stood at 7.9%. The bank’s asset quality remained stable, with a gross non-performing assets ratio of 2.86%.

Loan Book

Equitas Small Finance Bank’s loan book stood at Rs. 16,016 crore at the end of Q4, up by 9% YoY. The bank’s microfinance book grew by 13% YoY, while its vehicle finance and MSE (Micro and Small Enterprises) book grew by 10% and 6% YoY, respectively. The bank’s advances to the retail segment grew by 10% YoY, while its advances to the corporate segment grew by 14% YoY.

Deposit Base

Equitas Small Finance Bank’s deposit base grew by 13% YoY to Rs. 14,726 crore at the end of Q4. The bank’s current account savings account (CASA) ratio stood at 22%, while its retail term deposits grew by 10% YoY.

Recommendation

Considering the bank’s strong financial performance and stable asset quality, we recommend investors to hold onto their Equitas Small Finance Bank. The bank’s loan book and deposit base have shown steady growth, and its CASA ratio remains healthy. Moreover, the bank’s focus on the retail segment is likely to yield positive results in the long term.

Insights

Equitas Small Finance Bank focus on the retail segment is commendable, as it helps the bank diversify its loan book and reduce concentration risk. Moreover, the bank’s strong presence in the microfinance segment provides it with a competitive advantage, given the sector’s high growth potential.

Conclusion

Equitas Small Finance Bank Q4 results showcase the bank’s strong financial performance and stable asset quality. The bank’s loan book and deposit base have grown steadily, and its focus on the retail segment is likely to yield positive results in the long term. Given the bank’s strong fundamentals, we recommend investors to hold onto their Equitas Small Finance Bank stock.