Equitas Small Finance Bank share slips 5% post Q1 earnings

Equitas Small Finance Bank share declined over 5% today after the microfinance lender reported a 79 per cent fall in net profit for the June quarter. Stock of Equitas Small Finance Bank opened with a loss of 2.54% at Rs 61.35 on BSE.

The share touched an intraday low of Rs 59.75, down 5.08% against previous close.

Equitas Small Finance Bank share has fallen 8.84% in the last four days.

The midcap stock trades higher than 100 day and 200 day moving averages but lower than 5 day, 20 day and 50 day moving averages.

The share has gained 60.16% since the beginning of this year. Market cap of the firm fell to Rs 6,928.25 crore on BSE.

Total 1.03 lakh shares changed hands amounting to turnover of Rs 61.94 lakh on BSE.

Net profit fell to Rs 12 crore in Q1 on account of provisions for restructured accounts. The lender had posted a net profit of Rs 58 crore in the corresponding quarter of the previous fiscal.

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However, total income in Q1 rose to Rs 922.59 crore from Rs 750.96 crore in the year-ago period.

Net interest income in Q1 stood at Rs 461 crore, up from Rs 404 crore in the year-ago period. Net interest margin , the difference of interest earned and expended, stood at 7.87 per cent.

Explaining the effect of Covid-19 on its financials, the lender said  it has restructured advances of Rs 1,328 crore under COVID 1.0 and COVID 2.0, which forms around 7.5 per cent of its gross advances. In COVID 1.0, it restructured advances worth Rs 430 crore and Rs 897 crore of advances were restructured in COVID 2.0.

"The bank carries a provision of Rs 110.51 crore towards the restructured book of Rs 897 crore," the lender said.

On the asset front, gross non-performing assets (NPAs or bad loans) rose to 4.58 per cent of gross advances as of June 30, 2021 from 2.68 per cent by the year-ago same period.

Net NPAs rose to 2.29 per cent in Q1 from 1.39 per cent in the corresponding quarter of previous fiscal. Provision coverage ratio stands at 51.21 per cent.

Cash flows of small retailers were significantly impacted during the quarter due to lockdowns and COVID-related restrictions, the bank said.