Equitas Holdings Shares Rally On Q1 Performance

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Equitas Holdings shares surged as much as 5.5 per cent on Monday after the microfinance lender reported 64 per cent year-on-year jump in its net profit. Chennai-based Equitas Holdings posted a net profit of Rs 61 crore compared to Rs 37 crore in the corresponding quarter of last year, beating estimates.

Equitas’ robust earnings growth was led by healthy disbursements in microfinance, used commercial vehicles and micro enterprise loans, the company said in a release to Bombay Stock Exchange.

Equitas’ net interest income, or the difference of interest earned on advances over cost of funds, grew by 52 per cent to Rs 190 crore against Rs 126 crore last year.

Equitas’ total assets under management or loans increased 48 per cent to Rs 6,559 crore in Q1.

However, Equitas’ gross non-performing assets (NPA) increased to Rs 92 crore in the June quarter as against Rs 58 crore in the corresponding quarter of last fiscal. As a percentage of total advances, gross NPA rose to 1.61 per cent vs 1.44 per cent year-on-year.

HKN Raghavan, chief executive officer at Equitas Holding, told NDTV Profit that the company changed the NPA recognition period to 4 months from 5 months earlier, which led to increase in non-performing assets.

Net NPAs, which is gross NPA minus provisions, increased to 1.14 per cent of total advances compared to 1.07 per cent last year.

As of 11.19 a.m., Equitas Holdings shares traded 3.13 per cent higher at Rs 187.75 apiece compared to 0.37 per cent gain in the broader Nifty.