The earnings of Equitas Holdings in the second quarter fell by 58 percent to Rs 44 crore.
Equitas Holdings Limited reported a 58 percent drop in consolidated net profit for the second quarter ended September 2021, to Rs 44.28 crore, due to increasing costs. In the previous quarter, it made a net profit of Rs 105.80 crore, and in the June 2021 quarter, it had a net profit of Rs 13.75 crore.
During July-September 2021-22, overall income increased to Rs 999.21 crore, up from Rs 878.77 crore the previous year. In a regulatory statement, Equitas Holdings stated. However, overall spending grew to Rs 938.40 crore in the quarter, up from Rs 739.20 crore the year before, while tax expense decreased to Rs 16.52 crore from Rs 33.76 crore.
Equitas Holdings’ consolidated results contain financial information from its subsidiaries, Equitas Small Finance Bank and Equitas Technologies Private Limited (ETPL). The board of Equitas and its banking subsidiary authorised a plan of merger between the firm and the bank in July this year to meet with the RBI’s licencing condition that the promoter’s holding in the bank be reduced.
When implemented, the strategy, according to Equitas Holdings, will allow the bank to achieve SEBI’s minimum public ownership requirement. Following this, Equitas SFB’s board of directors authorised last month an eligible institution placement of equity shares to fulfil the minimum public shareholding of up to Rs 1,000 crore.
Equitas Holdings finished at Rs 129.75 on the BSE, down 0.31 percent.
Business-standard.com is the source for this information.
Equitas Holdings Share Price Target 2022; Maintain a ‘buy’ rating with a Rs 170 TP.
The following is a high-level summary of the 2QFY22 earnings performance: The amount of restructured debt outstanding, at Rs 18.2 billion (10.2 percent of total debt), was lower than expected by management (Rs 21 billion). GNPA stayed constant at 4.8 percent over time. Overdue loans of 31-90 days fell from 12.4 percent to 6.5 percent year over year. Credit costs were high due to additional provisions on restructured loans. Due to investments in technology and increased marketing spending, operating expense growth was substantial (cost-to-income ratio of 69%).
Management Comment: Across all segments, the bounce rate and collecting capacity are returning to pre-COVID-19 levels. In terms of operational front and asset quality performance, management expects 3QFY22 to be a routine quarter. The AUM should increase by more than 25% every year, the NIM should be between 8% and 8.5 percent in the near future, and the credit cost for FY22 should be about c2.5 percent of the loan. The short-term ROE goal is still set at 15%. A solid client acquisition run rate drives the deposit strategy, which should continue to gain traction. Given the increased investment on technology and marketing in 2HFY22, operating costs are expected to remain high.
Due to increased credit cost assumptions, we reduced our FY22-24 EPS expectations: We lower our NIM and raise our operational cost expectations for FY22. The operational profit is reduced by 2.9 percent as a result of this. We announce slight modifications to our operating profit expectations for FY23-24e (+1.8% /-0.2% for FY23/24e, respectively). To alleviate the burden of the restructured ledger (10.2 percent of debt), we’ve raised our credit cost forecasts for FY 23-24e to an average of 211 basis points, up from 186 basis points before. As a result, EPS for FY 22/23/24e will be decreased by 6.2 percent, 5.6 percent, and 9.2 percent, respectively.
Attractive assessment; Buy and Maintain: We believe the following are potential stock catalysts: I the underlying business has a strong growth and profitability outlook, even when accounting for relatively high credit costs that emphasise its customer profile; and ii) the holding company’s exemption, which is currently 26%, should fall as the bank’s merger plan moves forward (management expects the merger to be completed by 3QFY23). Equitas IN is valued at 1.3x FY23e BV (unchanged) with a target price of Rs 170. (unchanged). Keep ‘Buy’ selected. Downside risks include: 1) lower credit growth and profitability than projected, 2) lower asset quality than expected, and 3) the loss of key management individuals.
Financialexpress.com is the source for this information.
Equitas Holdings’ shares surges 20% as its banking subsidiary wins RBI approval to petition for a Scheme of Amalgamation.
The share price of Equitas Small Finance Firm rose over 12% in early session on July 12 after the bank received approval to apply for the Reserve Bank of India’s merger plan. Equitas Small Finance Bank stated in a regulatory filing on July 10 that it has acquired RBI approval to apply for the merger plan.
Furthermore, RBI has said that any ‘no objection’ provided to the plan of merger will have a negative impact on RBI’s ability to take action if the licencing standards are violated. At 1018 hours, the shares was trading at Rs 73.40, up Rs 8.30 or 12.75 percent. It is currently trading at Rs 76.75, which is a 52-week high. It has traded between an intraday high of Rs 76.75 and a low of Rs 69.05.
Equitas Holdings, on the other hand, was trading at Rs 138.40, up Rs 23.05 or 19.98% from its previous close. It is currently trading at Rs 138.40, which is a 52-week high. It has traded between a high of Rs 138.40 and a low of Rs 132.85 during the day. There were 132,757 shares with pending buy orders, but no sellers were available.
On July 9, the Reserve Bank of India (RBI) issued a message allowing Equitas Small Finance Bank Limited (ESFBL) to apply for the merger plan. Meanwhile, Equitas’ original promoter lock-in period expires on September 4, 2021. ESFBL has asked RBI if the proposal to merge Equitas and ESFBL may be presented to the central bank for approval, citing this. After the first promoter lock-in period has ended, the five-year period will expire.
Following the decision, Equitas stated that they will finish the merger plan and present it to the Board and the ESFBL for approval.
Moneycontrol.com is the source for this information.
Equitas Holdings is planning a merger with its small financing bank.
Equitas Holdings Limited, the bank’s promoter, is trying to merge the corporation with the bank, and has begun efforts to conclude the merger proposal after receiving RBI approval.
“A promoter of a Small Finance Bank (SFB) shall have a mandatory initial lock-in term of five years (“Early Promoter Lock-in”) for the time being RBI’s regulatory and supervisory relaxations in this respect,” Equitas Holdings stated in an exchange filing.
The first promoter lock-in for Equitas Small Finance Bank Limited expires on September 4, 2021.
“As a result, the bank requested RBI that, before the expiration of the abovementioned five years, a plan of merger of the firm with the bank, resulting in promoter departure, be presented to RBI for approval.” It remarked, “The early promoter lock-in is coming to an end.”
The RBI allowed Equitas Small Finance Bank to apply for approval for the scheme of amalgamation, according to the filing, adding that any “no objection” given on the plan of amalgamation, if and when given, would be without prejudice. of RBI to initiate action, if any, for violation of any licencing guidelines, terms and conditions of the licence, or any other applicable direction.
“As a result, we will take steps to finalise the plan of amalgamation, present it for approval to the Business’s Board of Directors and the Bank, and then proceed in accordance with applicable regulations and standards,” the company stated.
Equitas Holdings’ stock rose 2.44 percent to Rs 115.35 on the BSE on Friday, while Equitas Small Finance Bank’s stock rose 1.72 percent to Rs 65.10.
Businesstoday.in is the source of this information.
More Share Price Target Updates: