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ESAF SMALL FINANCE BANK 2023-24 Annual Report Analysis
Tue, 23 Jul

ESAF SMALL FINANCE BANK has announced its results for the year ended March 2024. Let us have a look at the detailed performance review of the bank during the year 2023-24.

ESAF SMALL FINANCE BANK Income Statement Analysis

  • Interest income during the year rose 33.8% on a year-on-year (YoY) basis.
  • Interest expenses were up by 42.4% YoY during the same period.
  • Operating expenses increased by 34.0% YoY during the year.
  • The bank's net interest income (NII) increased by 29.0% YoY during the fiscal. Consequently, net interest margins (NIM) witnessed a growth and stood at 9.9% in FY24 as against 9.8% in FY23.
  • Other income increased by 53.4% YoY during the year.
  • Net profit for the year increased by 40.8% YoY.
  • Net profit margins during the year increased to 11.1% in FY24 from 10.6% in FY23.

ESAF SMALL FINANCE BANK Income Statement – 2023-24

No. of Mths
Year Ending
12
Mar-23*
12
Mar-24*
% Change
Interest Income Rs m 28,53638,18433.8%
Other Income Rs m 2,8804,41853.4%
Interest Expense Rs m 10,17314,48742.4%
Net Interest Income Rs m 18,36323,69729.0%
Operating Expense Rs m 12,30516,48834.0%
Pre-provision Operating Profit Rs m 8,93711,62730.1%
Provisions & Contingencies Rs m 5,9147,37124.6%
Profit before tax Rs m 4,0605,70440.5%
Tax Rs m 1,0371,44939.7%
Profit after tax Rs m 3,0234,25640.8%
Minority Interest Rs m 000.0%
Net Interest Margin % 9.89.9
Net profit margin % 10.611.1
* Results Consolidated
Source: Accord Fintech, Equitymaster



Don't Miss: Key Information for Long-term Investors

ESAF SMALL FINANCE BANK Balance Sheet Analysis

  • The bank's deposits during FY24 stood at Rs 198.7 bn as compared to Rs 146.7 bn in FY23, thereby witnessing an increase of 35.5%.
  • Advances for the year stood at Rs 182.9 bn as compared to Rs 139.2 bn during FY23, a rise of 31.4%.
  • Cost of deposits for ESAF SMALL FINANCE BANK rose 9.2% and stood at 6.2%, while yield on advances rose to 18.9%.
  • The lender's investments rose to Rs 55.4 bn during the year from Rs 48.9 bn in FY23.
  • Borrowing stood at Rs 32.2 bn, a fall of 3.9% as compared to previous year.
  • Overall, the total assets and liabilities for FY24 stood at Rs 260.9 bn as against Rs 202.2 bn during FY23, thereby witnessing a rise of 29.0%.

ESAF SMALL FINANCE BANK Balance Sheet – as on March 2024

No. of Mths
Year Ending
12
Mar-23*
12
Mar-24*
% Change
Networth Rs m 17,09124,86145.5%
Advances Rs m 139,243182,93131.4%
Deposits Rs m 146,656198,67835.5%
Yield on advances % 18.218.9
Cost of Deposits % 5.76.2
Investments Rs m 48,88555,41013.3%
Borrowings Rs m 33,54232,225-3.9%
Total Assets Rs m 202,237260,86929.0%
* Results Consolidated
Source: Accord Fintech, Equitymaster



Current Valuations for ESAF SMALL FINANCE BANK

  • The trailing twelve-month earnings per share (EPS) of the bank stands at Rs 8.3, an improvement from the EPS of Rs 6.7 recorded last year.
  • The price to earnings (P/E) ratio, at the current price of Rs 50.3, stands at 8.2 times its trailing twelve months earnings.
  • The price to adjusted book value (P/ABV) ratio at current price levels stands at 1.0 times, while the price to income ratio stands at 0.9 times.

Per Share Data/Valuations

No. of Mths
Year Ending
12
Mar-23*
12
Mar-24*
Income per share (Unadj.) Rs 63.574.2
Earnings per share (Unadj.) Rs 6.78.3
Diluted earnings per share Rs 5.98.3
Avg P/E ratio Rs 0.08.2
Avg P/ABV ratio Rs 0.01.0
Avg Market Cap Rs 034,856
Dividends per share (Unadj.) Rs 0.000.70
* Results Consolidated
Source: Accord Fintech, Equitymaster



Ratio Analysis for ESAF SMALL FINANCE BANK

  • Efficiency Ratios

    Credit/Deposit Ratio: The bank's credit/deposit ratio deteriorated and stood at 92.1x during FY24, from 94.9x during FY23. The credit/deposit ratio tells us how much money a bank has raised in the form of deposits and has deployed as loans.

    Debt to Equity Ratio: The bank's debt to equity ratio decreased and stood at 9.29x during FY24, from 10.54x during FY23. The debt to equity ratio of a bank tells us how much debt a bank uses relative to its equity.

  • Liquidity Ratios

    Capital Adequacy Ratio (CAR): ESAF SMALL FINANCE BANK's capital adequacy ratio (CAR) was at 23.3% as on 31 March 2024 as compared to 19.8% a year ago. This ratio helps measure the financial strength of the bank or any finance company to meet their obligations using their assets and capital.

    A bank that has a good CAR has enough capital to absorb potential losses. Thus, it has less risk of becoming insolvent and losing depositor's money.

    Provision Coverage Ratio (PCR): Apart from CAR, you also need to take a look at the bank's PCR and LCR ratios. Provisioning coverage ratio (PCR) is the percentage of funds that a bank sets aside for covering losses due to bad debts.

    So a high PCR ratio means asset quality issues are under control and the bank is not vulnerable.

    Liquidity Coverage Ratio (LCR): The LCR is designed to ensure that banks hold a sufficient reserve of high-quality liquid assets to allow them to survive a period of significant liquidity stress lasting 30 calendar days.

  • Profitability Ratios

    Return on Equity (ROE): The return on equity (ROE) ratio for the bank deteriorated and stood at 17.1% during FY24, from 17.7% during FY23. The ROE measures the ability of a firm to generate profits from its shareholders capital in the company.

    Return on Assets (ROA): The return on asset (ROA) ratio of the bank improved and stood at 1.63% during FY24, from 1.49% during FY23. The ROA measures how efficiently the company uses its assets to generate earnings.

    Return on Capital Employed (ROCE): The ROCE for the bank improved and stood at 14.45% during FY24, from 12.42% during FY23. The ROCE measures the ability of a bank to generate profits from its total capital (shareholder capital plus debt capital) employed in the bank.

  • NPA Ratios

    Gross NPA Ratio: The gross NPA ratio is the ratio of a bank's gross NPAs to gross advances. ESAF SMALL FINANCE BANK's gross NPA ratio stood at 4.8% as of 31 March 2024 compared to 2.5% in the same period a year ago.

    A high gross NPA ratio is a bad thing as it indicates how much of a bank's loans are in danger of not being repaid.

    Net NPA Ratio: In simple language, net NPAs are simply the total non-performing assets minus the provision left aside. It gives you the exact value of NPAs after the bank has made provisions.

    The net NPA ratio of ESAF SMALL FINANCE BANK was 2.3% in financial year 2024. This compared with 1.1% a year ago.

Key Ratio Analysis

No. of Mths
Year Ending
12
Mar-23*
12
Mar-24*
Credit/Deposit Ratio x 94.992.1
Debt to Equity Ratio x 10.59.3
Loans / Deposits x 0.20.2
Capital Adequacy Ratio % 19.823.3
Return on Equity % 17.717.1
Return on Assets % 1.51.6
Return on Capital Employed % 12.414.5
% of Gross NPAs % 2.54.8
% of Net NPAs % 1.12.3
Yield on Advances x 18.218.9
Yield on Investments x 6.76.7
* Results Consolidated
Source: Accord Fintech, Equitymaster



To see how ESAF SMALL FINANCE BANK has performed over the last 5 years, please visit here.

ESAF SMALL FINANCE BANK Share Price Performance

Over the last one year, ESAF SMALL FINANCE BANK share price has moved up from Rs 0.0 to Rs 50.3, registering a gain of Rs 50.3 or around 0.0%.

Overall, the S&P BSE SENSEX is up 18.9% over the year.

(To know more, you can check out historical annual results for ESAF SMALL FINANCE BANK here and quarterly results for ESAF SMALL FINANCE BANK here)

Annual Report FAQs

What is the current share price of ESAF SMALL FINANCE BANK?

ESAF SMALL FINANCE BANK currently trades at Rs 39.0 per share. You can check out the latest share price performance of ESAF SMALL FINANCE BANK here...

What was the net interest income of ESAF SMALL FINANCE BANK in FY24? How does it compare to earlier years?

The net interest income of ESAF SMALL FINANCE BANK stood at Rs 23,697 m in FY24, which was up 29.0% compared to Rs 18,363 m reported in FY23.

ESAF SMALL FINANCE BANK's net interest income has grown from Rs 7,922 m in FY20 to Rs 23,697 m in FY24.

Over the past 5 years, the net interest income of ESAF SMALL FINANCE BANK has grown at a CAGR of 31.5%.

What was the net profit of ESAF SMALL FINANCE BANK in FY24? How does it compare to earlier years?

The net profit of ESAF SMALL FINANCE BANK stood at Rs 4,256 m in FY24, which was up 40.8% compared to Rs 3,023 m reported in FY24.

This compares to a net profit of Rs 547 m in FY22 and a net profit of Rs 1,054 m in FY21.

Over the past 5 years, ESAF SMALL FINANCE BANK''s net profit has grown at a CAGR of 22.3%.

What does the Key Ratio analysis of ESAF SMALL FINANCE BANK reveal?

Be it the bank's profitability, operations effectiveness or utilization of funds, ratio analysis is an important tool which helps in making investment decisions.

The ratio/financial analysis of ESAF SMALL FINANCE BANK reveals:

  • Net interest margin increased from 9.8% in FY23 to 9.9% in FY24.
  • Net profit margins grew from 10.6% in FY23 to 11.1% in FY24.
  • Debt to Equity ratio for FY24 stood at 9.3 as compared to 10.5 in FY23.

Here's the ratio/financial analysis of ESAF SMALL FINANCE BANK for the past 5 years.

 FY20FY21FY22FY23FY24
Net Interest Margin (%)9.69.17.39.89.9
Net Profit Margin (%)13.56.42.810.611.1
Debt to Equity Ratio (x)7.67.911.210.59.3

 

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