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  • Nov 21, 2015 - Capital First: Provision costs exert pressure on profits

Capital First: Provision costs exert pressure on profits
Nov 21, 2015

Capital First announced its results for the second quarter of financial year 2015-16 (2QFY16). The institution grew its income from operations by 26% YoY and the profits by 53% YoY during 2QFY16. Here is the detailed analysis of the results.

Performance Summary

  • Income from operations grew 25% YoY in 1HFY16 with a healthy 18.3% YoY growth in loan book. Consequently, the net interest income grew by robust 49.9% YoY.
  • Net interest margins moved marginally lower from 8.9% in 1HFY15 to 8.8% in 1HFY15.
  • Net profit for 1HFY16 increased by 55% YoY on account of higher net interest income and control on costs, with cost to income ratio at around 51%.
  • The margins could have been higher without the steep rise in provision costs.
  • Gross NPAs came in marginally higher at 0.9% from 0.7% in 4QFY15 while the net NPA ratio was at 0.5% as against 0.17% in March 2015.
  • The capital adequacy ratio of the entity stood comfortable above 20.1% as at the end of September 2015.

Consolidated financials

Rs (m) 2QFY15 2QFY16 Change 1HFY15 1HFY16 Change
Income from operations 3,454 4,334 25.5% 6,614 8,285 25.3%
Interest Expense 1,928 2,116 9.8% 3,823 4,102 7.3%
Net Interest Income 1,526 2,218 45.3% 2,791 4,183 49.9%
Net interest margin (%)       8.9% 8.8%  
Other Income 1 2 240.0% 67 4 -94.5%
Other Expense 913 1,143 25.2% 1,817 2,126 17.0%
Provisions and contingencies 218 471 116.1% 431 979 127.1%
Profit before tax 396 606 53.1% 610 1,082 77.3%
Tax 126 193 53.2% 132 341 158.3%
Profit after tax/ (loss) 270 413 53.1% 478 741 54.9%
Net profit margin (%) 7.8% 9.5%   7.2% 8.9%  
No. of shares (m)         91.1  
Book value per share (Rs)         180.6  
P/BV (x)*         2.1  

*Book value as on 30th September 2015

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