This S&P BSE Smallcap stock is part of Massachusetts Institute of Technology (MIT, USA), Birla Group and SBI Group’s portfolio and rose over 9% within the first half hour of markets opening after it reported growth on multiple fronts in its analysts’ day presentation filed on 14th September 2023.

The company has a market cap of Rs. 2328 crore and trades currently at Rs. 233.85, which is 11% and 41% from its 20 day and 200 day moving averages respectively; placing the stock just 4% from the 52 week high. 

Satin Creditcare Network Ltd (“Satin”) reported considerable growth in Q1, in the aforementioned investor presentation. First of which is growth in disbursements from focus on client acquisition which is 27% YoY from Rs. 1,554 crore to Rs. 1,980 crore. 

Assets under management (AUM) grew 31% YoY from Rs. 6,356 crore to Rs. 8,357 crore. AUM has shown consistent progress on a QoQ basis as well, increasing linearly by close to 5% QoQ for the last 4 quarters. Another thing to note is that the company has achieved the milestone of Rs. 9,000 crore of AUM on a consolidated basis. 

The company boasts a collection efficiency of 99.6% and a steadily declining Gross NPA which now stands at 2.5%, down 140 bps from 3.9% 3 quarters ago. On the operational front, the company has reduced its Operating Expense to AUM ratio by 110 bps to 5.8% YoY and Cost to Income Ratio by a whopping 980 bps to 48.9% YoY. 

Satin’s strategy toward efficiency and expansion is evident in growth in absolute terms as well. Its branches now stand at 1,310 with 2.8 million customers. AUM/ Branch has expanded from 5.77 to 7.26 crore YoY and AUM/ Loan Officer from 1.05 to 1.27 crore YoY. The company has set ambitious goals for the next 5 years as well, further aiming to reduce costs and maximize per unit asset of the company, tangible and intangible. 

Satin is a 2 year and 3 year multibagger,returning 192% and 255% respectively. Meaning , if you invested Rs. 1 lakh into Satin 2 years ago it would now be worth close to Rs. 3 lakh!  Satin Creditcare Network is a non-banking finance company, provides microfinance services in India. It is present mainly in North India, planning expansions through the 740+ districts in India, currently at 53% of districts’ presence. 

The promoters have increased their stake in the company by nearly 200 bps in Q1 FY24 and released all pledges which was previously at 2% of their holding. The company also has 12% FII & DII holding with the remaining being held by the public having no short interest. 

Written by Sandeep R

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