ESAF SFB stock slides over 16% even after net profit surges 200% YoY; here's why
ESAF Small Finance Bank witnessed a sharp decline of 16.35%, hitting an all-time low of ₹65.45 per share in today's trading session, marking its most significant intraday drop since its listing in November last year. Investor sentiment soured as the bank's asset quality deteriorated quarter-on-quarter in Q3. Its Gross Non-Performing Assets (GNPA) ratio rose to 4.16%, up from 2.64% in Q2FY24, although it showed improvement from 7.24% in Q3 FY23.
Also Read: LIC's journey so far: A muted debut, a long rough patch and a stellar rebound, this stock has seen it all Similarly, the Net Non-Performing Assets (NNPA) ratio increased to 2.19% from 1.19% in Q2FY24 but was lower compared to 3.73% in Q3FY23. Provisions surged to ₹137.8 crore in Q3 from ₹101.4 crore in the preceding quarter, representing a QoQ gain of 36.7%. The bank's operating expenses soared by 46.4% year-on-year to ₹429.3 crore, primarily driven by a substantial 54.1% increase in other expenses to ₹327.1 crore.
These heightened expenses, coupled with increased provisions, impacted the bank's profitability, resulting in a net profit of ₹112.1 crore, a 20% decrease quarter-on-quarter. However, on a YoY basis, the net profit surged sharply by 200%. On the operational front, Net Interest Income (NII) witnessed a growth of 32.3% year-on-year to ₹597 crore compared to ₹451 crore in Q3 FY23, and NIM stood at 10.6%.
Looking at it sequentially, the NII came in flat, and the NIM dropped by 40 basis points. The bank's cost of funds increased to 7.3% in Q3 FY24 from 6.2% in the corresponding period last year. Also Read: ₹3.35 to ₹25.35: Small-cap stock under ₹50 rallies 650% in four years ESAF Small Finance Bank (ESFB), a scheduled commercial bank, commenced its operations on
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