FEDBANK FINANCIAL SERVICES LTD 2023-24 Annual Report Analysis

Mon, 2 Sep

FEDBANK FINANCIAL SERVICES LTD has announced its results for the year ended March 2024. Let us have a look at the detailed performance review of the company during the year 2023-24.

FEDBANK FINANCIAL SERVICES LTD Income Statement Analysis

• Interest income during the year rose 33.8% on a year-on-year (YoY) basis.
• Interest expenses were up by 43.9% YoY during the same period.
• Operating expenses increased by 27.0% YoY during the year.
• The company's net interest income (NII) increased by 27.0% YoY during the fiscal. Consequently, net interest margins (NIM) witnessed a growth and stood at 100.5% in FY24 as against 95.0% in FY23.
• Other income declined by 1.7% YoY during the year.
• Net profit for the year increased by 35.8% YoY.
• Net profit margins during the year increased to 15.5% in FY24 from 15.3% in FY23.

FEDBANK FINANCIAL SERVICES LTD Income Statement – 2023-24

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*	% Change
Interest Income	Rs m	11,788	15,772	33.8%
Other Income	Rs m	563	554	-1.7%
Interest Expense	Rs m	4,722	6,796	43.9%
Net Interest Income	Rs m	7,066	8,977	27.0%
Operating Expense	Rs m	4,627	5,876	27.0%
Pre-provision Operating Profit	Rs m	3,003	3,654	21.7%
Provisions & Contingencies	Rs m	109	36	-67.0%
Profit before tax	Rs m	2,430	3,281	35.0%
Tax	Rs m	629	834	32.6%
Profit after tax	Rs m	1,801	2,447	35.8%
Minority Interest	Rs m	0	0	0.0%
Net Interest Margin	%	95.0	100.5
Net profit margin	%	15.3	15.5

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

FEDBANK FINANCIAL SERVICES LTD Balance Sheet Analysis

• The company's deposits during FY24 stood at Rs 0 m as compared to Rs 0 m in FY23, thereby witnessing an increase of 0.0%.
• Advances for the year stood at Rs 0 m as compared to Rs 0 m during FY23, a rise of 0.0%.
• Cost of deposits for FEDBANK FINANCIAL SERVICES LTD rose 0.0% and stood at 0.0%, while yield on advances rose to 0.0%.
• The lender's investments rose to Rs 8.9 bn during the year from Rs 7.4 bn in FY23.
• Borrowing stood at Rs 7.6 bn, a growth of 47.5% as compared to previous year.
• Overall, the total assets and liabilities for FY24 stood at Rs 111.4 bn as against Rs 90.5 bn during FY23, thereby witnessing a rise of 23.1%.

FEDBANK FINANCIAL SERVICES LTD Balance Sheet – as on March 2024

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*	% Change
Networth	Rs m	13,409	22,484	67.7%
Advances	Rs m	0	0	0.0%
Deposits	Rs m	0	0	0.0%
Yield on advances	%	0.0	0.0
Cost of Deposits	%	0.0	0.0
Investments	Rs m	7,440	8,928	20.0%
Borrowings	Rs m	5,162	7,612	47.5%
Total Assets	Rs m	90,492	111,357	23.1%

Current Valuations for FEDBANK FINANCIAL SERVICES LTD

• The trailing twelve-month earnings per share (EPS) of the company stands at Rs 6.6, an improvement from the EPS of Rs 5.6 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 119.7, stands at 19.8 times its trailing twelve months earnings.
• The price to adjusted book value (P/ABV) ratio at current price levels stands at 2.0 times, while the price to income ratio stands at 3.1 times.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*
Income per share (Unadj.)	Rs	36.6	42.7
Earnings per share (Unadj.)	Rs	5.6	6.6
Diluted earnings per share	Rs	4.8	6.6
Avg P/E ratio	Rs	0.0	19.8
Avg P/ABV ratio	Rs	0.0	2.0
Avg Market Cap	Rs	0	48,464
Dividends per share (Unadj.)	Rs	0.00	0.00

Ratio Analysis for FEDBANK FINANCIAL SERVICES LTD

• Efficiency Ratios

  Credit/Deposit Ratio: The company's credit/deposit ratio improved and stood at 0.0x during FY24, from 0.0x during FY23. The credit/deposit ratio tells us how much money a company has raised in the form of deposits and has deployed as loans.

  Debt to Equity Ratio: The company's debt to equity ratio decreased and stood at 0.34x during FY24, from 0.38x during FY23. The debt to equity ratio of a company tells us how much debt a company uses relative to its equity.

• Liquidity Ratios

  Capital Adequacy Ratio (CAR): FEDBANK FINANCIAL SERVICES LTD's capital adequacy ratio (CAR) was at 23.5% as on 31 March 2024 as compared to 17.9% a year ago. This ratio helps measure the financial strength of the company or any finance company to meet their obligations using their assets and capital.

  A company 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 company's PCR and LCR ratios. Provisioning coverage ratio (PCR) is the percentage of funds that a company sets aside for covering losses due to bad debts.

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

  Liquidity Coverage Ratio (LCR): The LCR is designed to ensure that companies 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 company deteriorated and stood at 10.9% during FY24, from 13.4% 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 company improved and stood at 2.20% during FY24, from 1.99% during FY23. The ROA measures how efficiently the company uses its assets to generate earnings.

  Return on Capital Employed (ROCE): The ROCE for the company improved and stood at 10.63% during FY24, from 9.76% during FY23. The ROCE measures the ability of a company to generate profits from its total capital (shareholder capital plus debt capital) employed in the company.

• NPA Ratios

  Gross NPA Ratio: The gross NPA ratio is the ratio of a company's gross NPAs to gross advances. FEDBANK FINANCIAL SERVICES LTD's gross NPA ratio stood at 1.7% as of 31 March 2024 compared to 2.0% in the same period a year ago.

  A high gross NPA ratio is a bad thing as it indicates how much of a company'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 company has made provisions.

  The net NPA ratio of FEDBANK FINANCIAL SERVICES LTD was 1.3% in financial year 2024. This compared with 1.6% a year ago.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*
Credit/Deposit Ratio	x	0.0	0.0
Debt to Equity Ratio	x	0.4	0.3
Loans / Deposits	x	0.0	0.0
Capital Adequacy Ratio	%	17.9	23.5
Return on Equity	%	13.4	10.9
Return on Assets	%	2.0	2.2
Return on Capital Employed	%	9.8	10.6
% of Gross NPAs	%	2.0	1.7
% of Net NPAs	%	1.6	1.3
Yield on Advances	x	0.0	0.0
Yield on Investments	x	0.0	0.0

To see how FEDBANK FINANCIAL SERVICES LTD has performed over the last 5 years, please visit here.

FEDBANK FINANCIAL SERVICES LTD Share Price Performance

Over the last one year, FEDBANK FINANCIAL SERVICES LTD share price has moved up from Rs 0.0 to Rs 119.7, registering a gain of Rs 119.7 or around 0.0%.

Overall, the S&P BSE SENSEX is up 26.9% over the year.

(To know more, you can check out historical annual results for FEDBANK FINANCIAL SERVICES LTD here and quarterly results for FEDBANK FINANCIAL SERVICES LTD here)