Utkarsh Small Fin hits all-time low on fall in Q2 profit; lowers guidance

Utkarsh Small Finance Bank shares slipped 9.4 per cent on Monday and logged its all time low at Rs 37 per share on BSE. The selling pressure in the stock came after the bank reported 55 per cent decline in consolidated net profit in Q2. 

 

Around 9:54 AM, Utkarsh Small Finance Bank shares were down 5.95 per cent at Rs 38.43 per share on BSE. In comparison, the BSE Sensex was up 0.12 per cent at 79,580.13. The market capitalisation of the company stood at Rs 4,232.93 crore. The 52-week high of the stock was at Rs 68.23 per share on BSE and 52-week low of the stock was at Rs 37 per share.

 

On Saturday, Utkarsh Small Finance Bank reported a 55 per cent fall in consolidated net profit to Rs 51 crore in Q2 as compared to Rs 114 crore a year ago. 

 

However, the net interest income (NII) grew 26 per cent for the quarter under review to Rs 588 crore as compared to Rs 442 crore a year ago. 

 

As per the filing, Utkarsh Small Finance Bank has reduced the loan book growth guidance for FY25 to 18 to 20 per cent (earlier 30 per cent). The management has also increased the credit cost guidance from 2 per cent to 3.5 to 4.5 per cent. 

 

Credit cost is a direct expense that reduces the net income of the lender. The higher the credit cost, the lower the net income and the return on equity. 

 

Meanwhile, the return on equity (RoE) guidance is reduced from 18 per cent to 7 per cent. 

 

Utkarsh Small Finance Bank is an Indian small finance bank that offers a range of banking and financial services to underserved and unbanked segments of the population, particularly in rural and semi-urban areas. Established with the aim of providing inclusive financial services, Utkarsh Small Finance Bank focuses on offering affordable and accessible banking solutions to individuals and small businesses, helping drive economic inclusion.

 

In the past one year, Utkarsh Small Finance shares have lost 20.3 per cent against Sensex's rise of 22 per cent.