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.
UTI Bank's net up 69% but.. - Views on News from Equitymaster
  • E-MAIL
  • A  A  A
  • May 5, 2001

    UTI Bank's net up 69% but..

    UTI Bank has recorded a 69% jump in its net profits to Rs 861 m for the year ended March '01. The bank has also maintained a healthy topline growth of 83% for the year. It derives nearly 40% of its operating income from interest on investments.

    (Rs m) FY00 FY01 Change 4QFY00 4QFY01 Change
    Interest Income 4,833 8,896 84.1% 1,463 2,727 86.4%
    Other Income 912 1,630 78.8% 425 761 79.2%
    Interest Expenditure 3,929 7,914 101.4% 1,138 2,449 115.3%
    Operating Profit (EBDIT) 904 983 8.7% 325 278 -14.6%
    Operating Profit Margin (%) 18.7% 11.0%   22.2% 10.2%  
    Other Expenditure 654 1,288 96.9% 195 454 132.8%
    Profit before Tax 1,162 1,325 14.1% 555 585 5.4%
    Provisions & Contingencies 375 284 -24.2% 198 190 -4.1%
    Tax 278 180 -35.3% 84 115 37.8%
    Profit after Tax/(Loss) 509 861 69.1% 273 279 2.3%
    Net profit margin (%) 10.5% 9.7%   18.7% 10.2%  
    No. of Shares (eoy) 132 132   132 132  
    Diluted Earnings per share* 3.9 6.5   8.3 8.5  
    P/E (at current price)   5.1     3.9  

    The profit growth of the bank however, tapered down during the fourth quarter to 2%. Net profit growth was over 100% in the last three quarters due to substantial decline in provisions. Also in the last quarter its operating margins fell to 10.2% from 22% in the corresponding previous quarter. As a result operating profits actually dropped by 15% in 4QFY01.

    UTI Bank invested aggressively during the year in expanding its network (through ATMs) and in technology. This has resulted in almost doubling of other expenses to Rs 1.3 bn. Also a provision of Rs 280 m for diminution in the value of investments (included in other expenses) trimmed the profit growth of the bank.

    At the current market price of Rs 33, UTI Bank is trading at PER of 5x its FY01 earnings. Its price to book value ratio of 1.7x is comparable among its peers in the industry. Although the topline performance of the bank is commendable, sliding operating margins are a concern. This is on the back of high cost of funds. Its a challenge for the bank to improve its OPM considering the softer interest rate regime going forward. However, with the increase in saving account deposits and growing proportion of retail assets, UTI Bank will be able to move up its margins in future.



    Equitymaster requests your view! Post a comment on "UTI Bank's net up 69% but..". 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.

    Proxy Plays: A Smart Way to Bet on 'Off Limits' Companies(The 5 Minute Wrapup)

    Aug 4, 2017

    The small-cap space is full of small players that are clear proxies to great growth stories and Indian megatrends.

    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...

    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


    Aug 16, 2017 (Close)


    • 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


    Compare Company With Charts