Jana SFB Q2FY25: Secured Growth Drives Advances, Profit Declines Amid MFI Stress
Company Name: Jana Small Finance Bank Ltd | NSE Code: JSFB| BSE Code: 544118 | 52 Week high/low: 761 / 365 | CMP: INR 510 | Mcap: INR 5,352 Cr | P/BV – 1.49
About the stock
➡️Jana SFB is leading small finance bank engaged in providing MSME loan, affordable housing loan, 2W loan, gold loan, Micro LAP etc. Jana SFB has rapidly expanded network with 776 banking outlet including 261 outlet in unbanked rural centres, in 22 states/ 2UTs while serving 4.5 Mn active customers.
Robust Advance growth thanks to secured book; Disbursement slowdown
➡️Jana’s total advance book grew 17.3% YoY (+2.5% QoQ) to 26,411 Cr thanks to the secured book. Secured book at 65% of the Jana total book report a growth of 28.6% YoY (+7.4% QoQ) to 17,063 Cr while Unsecured book moderate at 1% YoY and de-growth 5.4% QoQ to 9,348 Cr. Secured book contribution jump from 56% in Q2FY24 to 65% in Q2FY25 and management further planning to increased its weight in overall book.
➡️Healthy growth of secured book attributed to affordable housing (up 43.3% YoY) and Micro LAP (up 24.2% YoY) segment. This both combines cross the milestone of 10,000 Cr. 2W and gold loan also report a sound growth of 95% and 80% YoY but have low weightage in overall book. MSME and term loans to NBFCs grew 16.5% YoY and 3% YoY respectively.
➡️Disbursement growth modest at 0.3% YoY and 3.3% QoQ to 8,457 Cr due to MFI challenges.
➡️Deposit growth higher than advance growth at 31% YoY to 24,808 Cr while CASA as % of total deposit remains flat.
Book Growth (As on) | Q2FY25 | Q2FY24 | YoY (%) | Q1FY25 | QoQ (%) |
Advance | 26,411 | 21,842 | 17.30% | 25,751 | 2.50% |
Secured | 17,063 | 12,183 | 28.60% | 15,800 | 7.40% |
Unsecured | 9,348 | 9,255 | 1.00% | 9,853 | -5.40% |
Disbursement | 8,457 | 8,432 | 0.30% | 8,178 | 3.30% |
Deposit | 24,808 | 17,118 | 31% | 23,667 | 4.60% |
NII Soar on solid advance growth while NIMs contract
➡️Interest income grew 19% YoY and remain flat on QoQ to 1,166 Cr led by solid secured book growth while yield down 30 bps YoY (-90 bps QoQ) to 17.2%. NII grew 13% YoY to 594 Cr with support of advance growth while CoF expand and NIMs decline. On QoQ NII down 3% led to modest growth of book on QoQ and NIMs contraction. PPOP report 6% YoY while decline 16 QoQ to 299 Cr due to lower other income. PAT down 21% YoY and sequentially 43% to 97 Cr led by higher provision growth.
All figures are in Cr
Years | Q2FY25 | Q2FY24 | YoY (%) | Q1FY25 | QoQ (%) | Commentry |
Interest income | 1,166 | 979 | 19% | 1,167 | 0% | |
Interest expenses | 572 | 453 | 26% | 557 | 3% | |
NII | 594 | 526 | 13% | 610 | -3% | Healthy advance lead growth, NIMs contract |
Other income | 176 | 164 | 7% | 189 | -7% | |
Total Net income | 770 | 690 | 12% | 799 | -4% | |
Employee expenses | 296 | 239 | 24% | 278 | 6% | |
Other OpEx | 175 | 168 | 4% | 165 | 6% | |
Total Opex | 471 | 407 | 16% | 443 | 6% | |
PPOP | 299 | 283 | 6% | 356 | -16% | QoQ decline due to 30 bps decline in NIMs |
Provision | 210 | 160 | 31% | 196 | 7% | |
PBT | 89 | 123 | -28% | 160 | -44% | |
Tax expenses | -8 | 0 | -10 | -20% | ||
Tax rate | -9% | 0% | -6% | 44% | ||
PAT | 97 | 123 | -21% | 170 | -43% | Higher provision degrowth PAT |
PAT% | 7% | 11% | -33% | 13% | -42% | |
EPS | 9.28 | 16.73 | -45% | 16.27 | -43% | |
No. of equity shares | 10.45 | 7.35 | 42% | 10.45 | 0% |
Asset quality tempered on stress in MFI segment
➡️Jana asset quality has been decline due to the stress in the MFI segment. GNPA/NNPA jump 55 bps/13 bps YoY and 35 bps/remain flat QoQ to 2.86%/0.95%. Net NPA has 82% secured loan which signifies higher chances of recovery. Company has already done strong PCR for all business, PCR up 230 bps YoY (+450 bps QoQ) to 67.2%.
Asset Quality | Q2FY25 | Q2FY24 | YoY (bps) | Q1FY25 | QoQ (bps) |
GNPA | 2.86 | 2.31 | 55 | 2.51 | 35 |
NNPA | 0.95 | 0.82 | 13 | 0.95 | 0 |
Valuation and key metrics
➡️Currently the stock is trading at multiple of 1.49 price to book value and book value per share stood at 342 Rs. Yield decline 30 bps YoY (-90 bps QoQ) to 17.2% while CoF jump 60 bps YoY and remain flat on QoQ to 8%. Yield contraction is led by competitive environment and challenges in MFI segment while CoF expansion driven by increase in deposit rate for attracting retail deposit. This result in decline in NiMs by 20 bps YoY and 30 bps QoQ to 7.7%. Return ratio disappoint as ROE and ROA down by 500 bps and 40 bps YoY. Company’s capital position remain solid with 20.1% Capital adequacy ratio.
Key metrics | Q2FY25 | Q2FY24 | bps | Q1FY25 | bps |
Yield | 17.2 | 17.5 | -30 | 18.1 | -90 |
CoF | 8 | 7.4 | 60 | 8 | 0 |
NIMs | 7.7 | 7.9 | -20 | 8 | -30 |
Credit Cost | 1.86 | 2.33 | -47 | 186 | |
ROA | 1.2 | 1.6 | -40 | 2.1 | -90 |
ROE | 14.5 | 19.5 | -500 | 18.8 | -430 |
PCR | 67.2 | 64.9 | 230 | 62.7 | 450 |
CAR | 18.8 | 17.5 | 130 | 19.3 | -50 |
CASA | 20.1 | 20.5 | -40 | 20.4 | -30 |
Management Guidance for FY25.
➡️Management expect overall 20% growth in AUM and deposit in FY25.
➡️PAT growth of 30%-40% in FY25 will led by advance and disbursal growth.
➡️ROA and ROE maintained at 1.8% -2% and 19%-21% respectively. Company will continue to increase the secured business led to decline in NIMs.
The image added is for representation purposes only
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