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This banking stock rose 73% in nine sessions, do you own it?

BusinessToday.In     November 9, 2018

The Dhanlaxmi Bank stock has gained 73% during nine trading sessions since October 25, 2018 and delivered strong gains for its investors during the festive season. On October 25, 2018, the stock stood at 11.10 on the BSE. It touched an intra  day high of 19.30 in trade today.

However, the stock has lost 50% during the last one year and 39.90% since the beginning of this year.

The rise in the stock comes amid the Kerala-based private sector lender reporting doubling of its net profit to Rs 12.15 crore for the second quarter ended September 2018.

The private sector bank had posted a net profit of Rs 6.06 crore in the July-September period of 2017-18. It logged a net loss of Rs 45 crore during the first quarter of 2018-19 fiscal.

The lender reported its first profit in four quarters in Q2 of this fiscal.  Earlier, the bank reported Rs 17.16 crore loss in March 2018 quarter and Rs 21.74 crore loss in December quarter of previous fiscal.

Capital adequacy ratio rose to 14.16% in Q2 compared to 11.62% in the corresponding quarter of previous fiscal. It stood at 13.07% in Q1 of the current fiscal.

Total income in the second quarter of the current fiscal year fell to Rs 226.73 crore as against Rs 282.30 crore earlier, the bank said.

On the assets front, the bank witnessed year-on-year deterioration as gross non-performing assets (NPAs) rose to 7.81 per cent of gross loans by end of September from 6.11 per cent previously. Sequentially, it improved from 8.94 per cent as at end-June.

However, percentage of net NPAs stood at 2.92%, a six-quarter low for the bank. Operating profit margin rose to 76.55% in Q2 of the current fiscal compared to 58.32% in the corresponding quarter of the previous fiscal and 40.57% during the first quarter of the current fiscal.

In terms of provisions and contingencies, the bank reported a write-back of Rs 18.19 crore in the September quarter, while it had parked aside Rs 23.87 crore for the same quarter of the preceding fiscal.

Provision coverage ratio as on September 30, 2018 stood at 82.50 per cent.

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