Shares of Satin Creditcare Network Ltd opened 20% higher at ₹ 173.30 apiece on Tuesday’s early trades after the company reported robust results for the January to March quarter of the financial year 2022-23 (FY23). At 11:50 AM, its shares were trading 11.66% higher at ₹ 161.30 apiece on the National Stock Exchange (NSE).
Satin Creditcare Network is a non-banking finance company (NBFC) that offers financial requirements for excluded households at the bottom of the pyramid. It is a micro-finance institution with a presence in 24 states and union territories and more than 95,000 villages in India.
On a consolidated basis, the company’s AUM grew 20% to ₹ 9115 crores in FY23, against ₹ 7616 crores in FY22. Moreover, it reported a 69% increase in its Pre-Provision Operating Profit (PPOP) to ₹ 414 crores in FY23 from ₹ 244 crores in FY22. Its gross non-performing assets stood at 3.28%, amounting to ₹ 185 crores as on 31st March 2023 as compared to 8.01% as of 31st March 2022, amounting to ₹ 412 crores.
On a standalone basis, the company reported a profit after tax of ₹ 94 crores in the latest quarter (January to March 2023), which is 59% higher than ₹ 60 crores reported in the corresponding quarter last year. Its return on assets increased by 163 bps to 4.90% in the latest quarter as compared to 3.27% in the same period a year ago. Similarly, its return on equity ROE increased by 481 bps to 20.30% as compared to 15.48% a year ago.
“We represented strong business growth with our standalone AUM up by 24% YoY to Rs. 7,929 crore and recorded our highest ever profitability with PAT of Rs. 94 crore for the quarter, resulting in ROA of 4.9% and ROE at 20.0%. We are optimistic about maintaining this profitability trend in the coming years,” said HP Singh, Chairman cum Managing Director of Satin Creditcare Network, according to an exchange filing.
With a market capitalization of ₹ 1,224 crore, Satin Creditcare Network is a small-cap company. It has a low return on equity of 1.35%. Moreover, its shares were trading at a price-to-earnings ratio (P/E) of 654.00, which is significantly higher than the industry P/E of 20.43, indicating that the stock might be overvalued as compared to its peers.
Written by Simran Bafna
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