Bharat Financial Inclusion surges on robust Q1 results

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Bharat Financial Inclusion jumped 7.2% to Rs 819.05 at 11:55 IST on BSE after net profit surged 285.75% to Rs 235.91 crore on 46.51% rise in total income to Rs 414.11 crore in Q1 June 2016 over Q1 June 2015.
The result was announced during market hours today, 22 July 2016.

Meanwhile, the S&P BSE Sensex was down 18.48 points or 0.07% at 27,692.04.

More than usual volumes were traded on the counter. On BSE, so far 6.67 lakh shares were traded in the counter, compared with an average volume of 1.7 lakh shares in the past one quarter. The stock hit a high of Rs 825.80, which was also a 52-week high for the stock. The stock hit a low of Rs 776.10 so far during the day. The stock hit a 52-week low of Rs 369.45 on 18 September 2015. The stock had outperformed the market over the past one month till 21 July 2016, gaining 9.38% compared with Sensex’s 3.35% rise. The scrip had also outperformed the market in past one quarter, advancing 32.45% as against Sensex’s 7.07% rise.

The mid-cap company has an equity capital of Rs 127.55 crore. Face value per share is Rs 10.

Bharat Financial Inclusion announced that its gross loan portfolio excluding the states of Andhra Pradesh and Telangana registered a 10% sequential and a 76% yearly growth to Rs 8463 crore in Q1 June 2016. Bharat Financial Inclusion continues to maintain its lead as the most efficient microfinance institution (MFI) in the world, post its distinction in November 2015 of becoming the first private sector MFI in the world to charge a sub-20% interest rate 19.75% which is the lowest interest rate to date. The company’s marginal cost of borrowing continues to be at sub-10% level in Q1 June 2016. Its weighted average cost of borrowing further reduced to 10.7% in Q1 June 2016 from 11.1% in Q4 March 2016 and 11.9% in Q1 June 2015.

Loan disbursements increased by 59% to Rs 3769 crore in Q1 June 2016 over Q1 June 2015. During the quarter, Bharat Financial Inclusion had incremental drawdowns of Rs 1096 crore excluding origination under managed loans. The company also originated Rs 303 crore worth of loans under managed portfolio in Q1 June 2016. The quarter also witnessed completion of securitization transactions worth Rs 214 crore rated as ‘AA (SO)’ The company also recognized a MAT credit of Rs 97 crore as on 31 March 2016, which translates into a net profit of Rs 236 crore in Q1 June 2016.

The company has an un-availed deferred tax benefit of Rs 308 crore which will be available to offset tax on future taxable income.

Bharat Financial Inclusion formerly SKS Microfinance is among the largest microfinance companies in India. The company’s mission is to provide financial services to the economically weaker sections.