X

Sign up for Equitymaster's free daily newsletter, The 5 Minute WrapUp and get access to our latest Multibagger guide (2017 Edition) on picking money-making stocks.

This is an entirely free service. No payments are to be made.


Download Now Subscribe to our free daily e-letter, The 5 Minute WrapUp and get this complimentary report.
We hate spam as much as you do. Check out our Privacy Policy and Terms Of Use.
Low provisions drive UTI Bank's profits - Views on News from Equitymaster
 
 
  • PRINT
  • E-MAIL
  • FEEDBACK
  • A  A  A
  • Jan 23, 2001

    Low provisions drive UTI Bank's profits

    UTI Bank has recorded a YoY 105% jump in its net profits to Rs 230 m in 3QFY01. However if we exclude the provision & contingencies from the profits it reflects an increase of 71%. Further, the investment in preference shares and tax free bonds enabled the bank to save tax.

    (Rs m) 3QFY00 3QFY01 Change
    Interest Income 1,159 2,376 105.0%
    Other Income 144 283 96.0%
    Interest Expenditure 925 2,048 121.4%
    Operating Profit (EBDIT) 234 327 40.0%
    Operating Profit Margin (%) 20.2% 13.8%  
    Other Expenditure 125 283 126.5%
    Depreciation 28 33 18.5%
    Profit before Tax 226 295 30.6%
    Provisions & Contingencies 53 29 -45.3%
    Tax 74 36 -51.8%
    Profit after Tax/(Loss) 99 230 133.3%
    Net profit margin (%) 8.5% 9.7%  
    No. of Shares (eoy) 132 132  
    Diluted Earnings per share* 3.0 7.0  
    P/E (at current price) 16.4 7.0  
    *(annualised)      

    The retail focus of the bank through wide branch and ATM network coupled with increase in deposits enabled the bank to grew its interest income by 105% during the 3QFY01. However due to more than proportionate increase in the interest expenses operating margins declined to 13.8% (20.2% in 3QFY00). The rise in the other expenses by 127% was mainly on account of investment in technology and infrastructure which will drive the bank's future profits.

    Although UTI Bank's saving deposits doubled during the quarter, it contributes a marginal 5.6% to total deposits compared to more than 10% in case of HDFC Bank and ICICI Bank. High cost of deposits has resulted in lower operating margins to the bank.

    At the current market price of Rs 49, UTI Bank is trading at PER of 7times its 31QFY01 annualised earnings. The Bank's Price/Book value ratio of 2.7 times is comparatively less than HDFC Bank's 8 times. The bank's focus on retail, e-commerce and improvement in NPA ratio is likely to trigger re-rating in the stock in future.

     

     

    Equitymaster requests your view! Post a comment on "Low provisions drive UTI Bank's profits". Click here!

      
     

    More Views on News

    Axis Bank: Outside Watchlist Slippages a Big Worry (Quarterly Results Update - Detailed)

    Jul 31, 2017

    Almost 74% of the watchlist as provided by the bank of Rs 226 billion in FY16 has turned into non-performing assets.

    Axis Bank: Higher Provisioning Eats into Bank's Profitability (Quarterly Results Update - Detailed)

    May 12, 2017

    Asset quality woes continue to haunt the Bank's financial performance for the year ended March 2017.

    Axis Bank: Provisioning Woes Multiply (Quarterly Results Update - Detailed)

    Jan 24, 2017

    Axis Bank declared the results for the third quarter of the financial year ended March 2017 (3QFY17). The bank has reported 4.1% YoY growth in net interest income while net profits declined 73.4% YoY in 3QFY17.

    IDFC Bank: Strong Trading Income Shields Credit Slowdown (Quarterly Results Update - Detailed)

    Aug 10, 2017

    IDFC Bank is taking steps to address contracting NIMs and successfully transition in to a retail bank.

    ICICI Bank: Loan Slippages Trending Downwards (Quarterly Results Update - Detailed)

    Aug 10, 2017

    Asset quality will be the key thing to watch out for going forward.

    More Views on News

    Most Popular

    Demonetisation Barely Made Any Difference to Tax Collections(Vivek Kaul's Diary)

    Aug 7, 2017

    The data tells us quite a different story from the one the government is trying to project.

    A 'Backdoor' to Multibaggers: It's Like Investing in Asian Paints Ten Years Ago(The 5 Minute Wrapup)

    Aug 10, 2017

    Don't miss these proxy bets on growing companies or in a few years you will be looking back with regret.

    Should You Invest In Bharat-22 ETF? Know Here...(Outside View)

    Aug 8, 2017

    Bharat-22 is one of the most diverse ETFs offered so far by the Government. Know here if you should invest...

    Signs of Life in the India VIX(Daily Profit Hunter)

    Aug 12, 2017

    The India VIX is up 36% in the last week. Fear has gone up but is still low by historical standards.

    7 Financial Gifts For Your Sister This Raksha Bandhan(Outside View)

    Aug 7, 2017

    Raksha Bandhan signifies the brother-sister bond. Here are 7 thoughtful financial gifts for sisters...

    More
    Copyright © Equitymaster Agora Research Private Limited. All rights reserved.
    Any act of copying, reproducing or distributing this newsletter whether wholly or in part, for any purpose without the permission of Equitymaster is strictly prohibited and shall be deemed to be copyright infringement.

    LEGAL DISCLAIMER: Equitymaster Agora Research Private Limited (hereinafter referred as 'Equitymaster') is an independent equity research Company. Equitymaster is not an Investment Adviser. Information herein should be regarded as a resource only and should be used at one's own risk. This is not an offer to sell or solicitation to buy any securities and Equitymaster will not be liable for any losses incurred or investment(s) made or decisions taken/or not taken based on the information provided herein. Information contained herein does not constitute investment advice or a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual subscribers. Before acting on any recommendation, subscribers should consider whether it is suitable for their particular circumstances and, if necessary, seek an independent professional advice. This is not directed for access or use by anyone in a country, especially, USA or Canada, where such use or access is unlawful or which may subject Equitymaster or its affiliates to any registration or licensing requirement. All content and information is provided on an 'As Is' basis by Equitymaster. Information herein is believed to be reliable but Equitymaster does not warrant its completeness or accuracy and expressly disclaims all warranties and conditions of any kind, whether express or implied. Equitymaster may hold shares in the company/ies discussed herein. As a condition to accessing Equitymaster content and website, you agree to our Terms and Conditions of Use, available here. The performance data quoted represents past performance and does not guarantee future results.

    SEBI (Research Analysts) Regulations 2014, Registration No. INH000000537.

    Equitymaster Agora Research Private Limited. 103, Regent Chambers, Above Status Restaurant, Nariman Point, Mumbai - 400 021. India.
    Telephone: +91-22-61434055. Fax: +91-22-22028550. Email: info@equitymaster.com. Website: www.equitymaster.com. CIN:U74999MH2007PTC175407
     

    Become A Smarter Investor In
    Just 5 Minutes

    Multibagger Stocks Guide 2017
    Get our special report, Multibagger Stocks Guide (2017 Edition) Now!
    We will never sell or rent your email id.
    Please read our Terms

    AXIS BANK SHARE PRICE


    Aug 18, 2017 10:18 AM

    TRACK AXIS BANK

    • Track your investment in AXIS BANK with Equitymaster's Portfolio Tracker. Set live price alerts, get research alerts and more. Get access now...
    • Add To MyStocks

    AXIS BANK 5-YR ANALYSIS

    Detailed Financial Information With Charts

    COMPARE AXIS BANK WITH

    MARKET STATS