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Gruh Finance: Firm Grip on Margins, Quality and Costs - Views on News from Equitymaster
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  • May 17, 2017 - Gruh Finance: Firm Grip on Margins, Quality and Costs

Gruh Finance: Firm Grip on Margins, Quality and Costs
May 17, 2017

Gruh Finance announced its results for quarter and financial year ended March 2017. The institution grew its income from operations by 16.6% YoY and the profits by 21.8% YoY during FY17. Here is the detailed analysis of the results.

Performance Summary
  • Income from operations grew 16.6% YoY in FY17 with a healthy 19% YoY growth in loan book. Consequently, the net interest income grew by 21% YoY.
  • Home loan disbursements grew by 31% YoY while the entity reduced loan against property disbursements by almost 50%.
  • Net interest margins remained stable at around 4% despite pressure on yields.
  • Net profit for FY17 increased by 22% YoY despite higher provisioning costs. Other expenses remained in control, with cost to income ratio at around 16%.
  • Gross NPAs have remained stable at 0.3% while the net NPA ratio was nil.

    Rs (m) 4QFY16 4QFY17 Change FY16 FY17 Change
    Income from operations 3,669 4,161 13.4% 12,754 14,873 16.6%
    Interest Expense 2,150 2,306 7.3% 8,074 9,196 13.9%
    Net Interest Income 1,519 1,855 22.1% 4,680 5,677 21.3%
    Net interest margin (%)       4.1% 4.2%  
    Other Income - -   - -  
    Other Expense 210 241 14.8% 844 935 10.8%
    Provisions and contingencies 61 14 -77.0% 219 322 47.0%
    Profit before tax 1,248 1,600 28.2% 3,617 4,420 22.2%
    Tax 369 495 34.1% 1,181 1,453 23.0%
    Profit after tax/ (loss) 879 1,105 25.7% 2,436 2,967 21.8%
    Net profit margin (%) 24.0% 26.6%   17.0% 17.2%  
    No. of shares (m)         363.5  
    Book value per share (Rs)         30.6  
    P/BV (x)*         13.7  

    *Book value as on 31st March 2017

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