UJJIVAN SMALL FINANCE BANK 2023-24 Annual Report Analysis

Thu, 4 Jul

UJJIVAN 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.

UJJIVAN SMALL FINANCE BANK Income Statement Analysis

• Interest income during the year rose 36.3% on a year-on-year (YoY) basis.
• Interest expenses were up by 54.6% YoY during the same period.
• Operating expenses increased by 26.5% YoY during the year.
• The bank's net interest income (NII) increased by 26.4% YoY during the fiscal. Consequently, net interest margins (NIM) witnessed a growth and stood at 9.3% in FY24 as against 9.1% in FY23.
• Other income increased by 33.5% YoY during the year.
• Net profit for the year increased by 16.5% YoY.
• Net profit margins during the year declined to 22.6% in FY24 from 26.4% in FY23.

UJJIVAN SMALL FINANCE BANK Income Statement – 2023-24

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*	% Change
Interest Income	Rs m	41,650	56,772	36.3%
Other Income	Rs m	5,892	7,868	33.5%
Interest Expense	Rs m	14,671	22,677	54.6%
Net Interest Income	Rs m	26,979	34,095	26.4%
Operating Expense	Rs m	18,021	22,791	26.5%
Pre-provision Operating Profit	Rs m	14,850	19,171	29.1%
Provisions & Contingencies	Rs m	3,851	6,356	65.0%
Profit before tax	Rs m	14,672	17,022	16.0%
Tax	Rs m	3,673	4,207	14.5%
Profit after tax	Rs m	10,999	12,815	16.5%
Minority Interest	Rs m	0	0	0.0%
Net Interest Margin	%	9.1	9.3
Net profit margin	%	26.4	22.6

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UJJIVAN SMALL FINANCE BANK Balance Sheet Analysis

• The bank's deposits during FY24 stood at Rs 314.6 bn as compared to Rs 255.4 bn in FY23, thereby witnessing an increase of 23.2%.
• Advances for the year stood at Rs 268.8 bn as compared to Rs 212.9 bn during FY23, a rise of 26.3%.
• Cost of deposits for UJJIVAN SMALL FINANCE BANK rose 25.3% and stood at 6.5%, while yield on advances rose to 18.5%.
• The lender's investments rose to Rs 97.7 bn during the year from Rs 85.1 bn in FY23.
• Borrowing stood at Rs 21.7 bn, a fall of 17.8% as compared to previous year.
• Overall, the total assets and liabilities for FY24 stood at Rs 404.2 bn as against Rs 333.2 bn during FY23, thereby witnessing a rise of 21.3%.

UJJIVAN SMALL FINANCE BANK Balance Sheet – as on March 2024

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*	% Change
Networth	Rs m	41,579	41,285	-0.7%
Advances	Rs m	212,897	268,829	26.3%
Deposits	Rs m	255,377	314,622	23.2%
Yield on advances	%	17.4	18.5
Cost of Deposits	%	5.2	6.5
Investments	Rs m	85,103	97,660	14.8%
Borrowings	Rs m	26,415	21,708	-17.8%
Total Assets	Rs m	333,169	404,222	21.3%

Current Valuations for UJJIVAN SMALL FINANCE BANK

• The trailing twelve-month earnings per share (EPS) of the bank stands at Rs 24.7, a decline from the EPS of Rs 5.6 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 44.3, stands at 1.8 times its trailing twelve months earnings.
• The price to adjusted book value (P/ABV) ratio at current price levels stands at 2.1 times, while the price to income ratio stands at 0.4 times.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*
Income per share (Unadj.)	Rs	21.3	109.4
Earnings per share (Unadj.)	Rs	5.6	24.7
Diluted earnings per share	Rs	5.7	6.6
Avg P/E ratio	Rs	4.2	1.8
Avg P/ABV ratio	Rs	1.9	2.1
Avg Market Cap	Rs	45,936	22,824
Dividends per share (Unadj.)	Rs	1.25	1.50

Ratio Analysis for UJJIVAN SMALL FINANCE BANK

• Efficiency Ratios

  Credit/Deposit Ratio: The bank's credit/deposit ratio improved and stood at 85.4x during FY24, from 83.4x 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 increased and stood at 8.15x during FY24, from 6.78x 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): UJJIVAN SMALL FINANCE BANK's capital adequacy ratio (CAR) was at 24.7% as on 31 March 2024 as compared to 25.8% 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 improved and stood at 31.0% during FY24, from 26.5% 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 deteriorated and stood at 3.17% during FY24, from 3.30% 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 deteriorated and stood at 26.50% during FY24, from 28.36% 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. UJJIVAN SMALL FINANCE BANK's gross NPA ratio stood at 2.2% as of 31 March 2024 compared to 2.9% 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 UJJIVAN SMALL FINANCE BANK was 0.3% in financial year 2024. This compared with 0.0% a year ago.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*
Credit/Deposit Ratio	x	83.4	85.4
Debt to Equity Ratio	x	6.8	8.1
Loans / Deposits	x	0.1	0.1
Capital Adequacy Ratio	%	25.8	24.7
Return on Equity	%	26.5	31.0
Return on Assets	%	3.3	3.2
Return on Capital Employed	%	28.4	26.5
% of Gross NPAs	%	2.9	2.2
% of Net NPAs	%	0.0	0.3
Yield on Advances	x	17.4	18.5
Yield on Investments	x	4.8	7.2

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

UJJIVAN SMALL FINANCE BANK Share Price Performance

Over the last one year, UJJIVAN SMALL FINANCE BANK share price has moved up from Rs 40.2 to Rs 44.3, registering a gain of Rs 4.1 or around 10.2%.

Meanwhile, the S&P BSE BANKEX is trading at 60,344.2 (up 1.8%). Over the last one year it has moved up from 51,050.2 to 60,344.2, registering a gain of 9,294.0 points (up 18.2%).

Overall, the S&P BSE SENSEX is up 22.7% over the year.

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