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SURYODAY SMALL FINANCE BANK 2022-23 Annual Report Analysis

Thu, 31 Aug

SURYODAY SMALL FINANCE BANK has announced its results for the year ended March 2023. Let us have a look at the detailed performance review of the bank during the year 2022-23.

SURYODAY SMALL FINANCE BANK Income Statement Analysis

• Interest income during the year rose 25.7% on a year-on-year (YoY) basis.
• Interest expenses were up by 22.3% YoY during the same period.
• Operating expenses increased by 22.6% YoY during the year.
• The bank's net interest income (NII) increased by 27.7% YoY during the fiscal. Consequently, net interest margins (NIM) witnessed a growth and stood at 8.7% in FY23 as against 8.6% in FY22.
• Other income increased by 4.1% YoY during the year.
• Net profit for the year increased by 183.5% YoY.
• Net profit margins during the year increased to 6.6% in FY23 from -9.9% in FY22.

SURYODAY SMALL FINANCE BANK Income Statement – 2022-23

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Interest Income	Rs m	9,418	11,837	25.7%
Other Income	Rs m	936	974	4.1%
Interest Expense	Rs m	3,574	4,371	22.3%
Net Interest Income	Rs m	5,845	7,466	27.7%
Operating Expense	Rs m	4,131	5,065	22.6%
Pre-provision Operating Profit	Rs m	2,649	3,375	27.4%
Provisions & Contingencies	Rs m	3,579	2,598	-27.4%
Profit before tax	Rs m	-1,271	1,009	179.4%
Tax	Rs m	-340	232	168.1%
Profit after tax	Rs m	-930	777	183.5%
Minority Interest	Rs m	0	0	0.0%
Net Interest Margin	%	8.6	8.7
Net profit margin	%	-9.9	6.6

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SURYODAY SMALL FINANCE BANK Balance Sheet Analysis

• The bank's deposits during FY23 stood at Rs 51.7 bn as compared to Rs 38.5 bn in FY22, thereby witnessing an increase of 34.1%.
• Advances for the year stood at Rs 60.2 bn as compared to Rs 47.5 bn during FY22, a rise of 26.6%.
• Cost of deposits for SURYODAY SMALL FINANCE BANK fell 10.3% and stood at 5.3%, while yield on advances fell to 17.0%.
• The lender's investments rose to Rs 25.7 bn during the year from Rs 20.6 bn in FY22.
• Borrowing stood at Rs 27.7 bn, a growth of 8.4% as compared to previous year.
• Overall, the total assets and liabilities for FY23 stood at Rs 98.6 bn as against Rs 81.8 bn during FY22, thereby witnessing a rise of 20.6%.

SURYODAY SMALL FINANCE BANK Balance Sheet – as on March 2023

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*	% Change
Networth	Rs m	14,959	15,759	5.4%
Advances	Rs m	47,509	60,151	26.6%
Deposits	Rs m	38,539	51,667	34.1%
Yield on advances	%	17.2	17.0
Cost of Deposits	%	5.9	5.3
Investments	Rs m	20,577	25,702	24.9%
Borrowings	Rs m	25,513	27,654	8.4%
Total Assets	Rs m	81,802	98,612	20.6%

Current Valuations for SURYODAY SMALL FINANCE BANK

• The trailing twelve-month earnings per share (EPS) of the bank stands at Rs 7.3, an improvement from the EPS of Rs -8.8 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 179.0, stands at 16.1 times its trailing twelve months earnings.
• The price to adjusted book value (P/ABV) ratio at current price levels stands at 1.2 times, while the price to income ratio stands at 1.1 times.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*
Income per share (Unadj.)	Rs	88.7	111.5
Earnings per share (Unadj.)	Rs	-8.8	7.3
Diluted earnings per share	Rs	-8.8	7.3
Avg P/E ratio	Rs	-21.0	16.1
Avg P/ABV ratio	Rs	0.7	1.2
Avg Market Cap	Rs	19,541	12,484
Dividends per share (Unadj.)	Rs	0.00	0.00

Ratio Analysis for SURYODAY SMALL FINANCE BANK

• Efficiency Ratios

  Credit/Deposit Ratio: The bank's credit/deposit ratio deteriorated and stood at 116.4x during FY23, from 123.3x during FY22. The credit/deposit ratio tells us how much money a bank has raised in the form of deposits and has deployed as loans.

  Debt to Equity Ratio: The bank's debt to equity ratio increased and stood at 5.03x during FY23, from 4.28x during FY22. The debt to equity ratio of a bank tells us how much debt a bank uses relative to its equity.

• Liquidity Ratios

  Capital Adequacy Ratio (CAR): SURYODAY SMALL FINANCE BANK's capital adequacy ratio (CAR) was at 33.7% as on 31 March 2023 as compared to 37.9% a year ago. This ratio helps measure the financial strength of the bank or any finance company to meet their obligations using their assets and capital.

  A bank that has a good CAR has enough capital to absorb potential losses. Thus, it has less risk of becoming insolvent and losing depositor's money.

  Provision Coverage Ratio (PCR): Apart from CAR, you also need to take a look at the bank's PCR and LCR ratios. Provisioning coverage ratio (PCR) is the percentage of funds that a bank sets aside for covering losses due to bad debts.

  So a high PCR ratio means asset quality issues are under control and the bank is not vulnerable.

  Liquidity Coverage Ratio (LCR): The LCR is designed to ensure that banks hold a sufficient reserve of high-quality liquid assets to allow them to survive a period of significant liquidity stress lasting 30 calendar days.

• Profitability Ratios

  Return on Equity (ROE): The return on equity (ROE) ratio for the bank improved and stood at 4.9% during FY23, from -6.2% during FY22. The ROE measures the ability of a firm to generate profits from its shareholders capital in the company.

  Return on Assets (ROA): The return on asset (ROA) ratio of the bank improved and stood at 0.79% during FY23, from -1.14% during FY22. The ROA measures how efficiently the company uses its assets to generate earnings.

  Return on Capital Employed (ROCE): The ROCE for the bank improved and stood at 6.26% during FY23, from 0.05% during FY22. The ROCE measures the ability of a bank to generate profits from its total capital (shareholder capital plus debt capital) employed in the bank.

• NPA Ratios

  Gross NPA Ratio: The gross NPA ratio is the ratio of a bank's gross NPAs to gross advances. SURYODAY SMALL FINANCE BANK's gross NPA ratio stood at 3.1% as of 31 March 2023 compared to 11.8% in the same period a year ago.

  A high gross NPA ratio is a bad thing as it indicates how much of a bank's loans are in danger of not being repaid.

  Net NPA Ratio: In simple language, net NPAs are simply the total non-performing assets minus the provision left aside. It gives you the exact value of NPAs after the bank has made provisions.

  The net NPA ratio of SURYODAY SMALL FINANCE BANK was 1.6% in financial year 2023. This compared with 6.0% a year ago.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-22*	12 Mar-23*
Credit/Deposit Ratio	x	123.3	116.4
Debt to Equity Ratio	x	4.3	5.0
Loans / Deposits	x	0.7	0.5
Capital Adequacy Ratio	%	37.9	33.7
Return on Equity	%	-6.2	4.9
Return on Assets	%	-1.1	0.8
Return on Capital Employed	%	0.0	6.3
% of Gross NPAs	%	11.8	3.1
% of Net NPAs	%	6.0	1.6
Yield on Advances	x	17.2	17.0
Yield on Investments	x	5.1	4.4

To see how SURYODAY SMALL FINANCE BANK has performed over the last 5 years, please visit here.

SURYODAY SMALL FINANCE BANK Share Price Performance

Over the last one year, SURYODAY SMALL FINANCE BANK share price has moved up from Rs 102.5 to Rs 179.0, registering a gain of Rs 76.5 or around 74.6%.

Meanwhile, the S&P BSE BANKEX is trading at 49,696.4 (down 0.6%). Over the last one year it has moved up from 45,295.7 to 49,696.4, registering a gain of 4,400.7 points (up 9.7%).

Overall, the S&P BSE SENSEX is up 12.3% over the year.

(To know more, you can check out historical annual results for SURYODAY SMALL FINANCE BANK here and quarterly results for SURYODAY SMALL FINANCE BANK here)