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Gruh Finance: Quality in check - Views on News from Equitymaster
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Gruh Finance: Quality in check
Feb 22, 2016

Gruh Finance announced its results for the third quarter and first nine months of the financial year 2015-16 (9mFY16). The institution grew its income from operations by 20.7% YoY and the profits by 20.1% YoY during 9mFY16. Here is the detailed analysis of the results.

Financial Performance

  • Income from operations grew 21% YoY in 9mFY16 with a healthy 23% YoY growth in loan book. Consequently, the net interest income grew by robust 22.5% YoY.
  • Net interest margins moved down from 4.2% in 9mFY15 to 4.1% in 9mFY16.
  • Net profit for the first nine months increased by 20.1% YoY on account of higher net interest income and lower provisioning costs. Other expenses too remained in control, with cost to income ratio at around 19%.
  • Gross NPAs have remained stable at 0.6% while the net NPA ratio is 0.1%.
  • The capital adequacy ratio of the entity stood comfortably at 19.7%, well above the stipulated 15%, at the end of December 2015.

Financial Performance Snapshot

Rs (m) 3QFY15 3QFY16 Change 9mFY15 9mFY16 Change
Income from operations 2,711 3,235 19.3% 7,704 9,297 20.7%
Interest Expense 1,736 2,034 17.2% 4,949 5,923 19.7%
Net Interest Income 975 1,201 23.2% 2,755 3,374 22.5%
Net interest margin (%)       4.2% 4.1%  
Other Income - -   - -  
Other Expense 157 207 31.8% 494 640 29.6%
Provisions and contingencies 145 176 21.4% 302 365 20.9%
Profit before tax 673 818 21.5% 1,959 2,369 20.9%
Tax 225 280 24.4% 662 811 22.5%
Profit after tax/ (loss) 448 538 20.1% 1,297 1,558 20.1%
Net profit margin (%) 16.5% 16.6%   16.8% 16.8%  
No. of shares (m)         363.5  
Book value per share (Rs)         23.9  
P/BV (x)*         10.2  

*Book value as on 30th September 2015

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