Jana SFB Q3FY25: Strong Secured Loan Growth, Margins Under Pressure
Company Name: Jana Small Finance Bank Ltd | NSE Code: JSFB| BSE Code: 544118 | 52 Week high/low: 761 / 364 | CMP: INR 430 | Mcap: INR 4,509 Cr | P/BV – 1.25
Abouth 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 778 banking outlet including 252 outlet in unbanked rural centres, in 22 states/ 2UTs while serving 4.6 Mn active customers.
Robust Advance growth thanks to secured book
➡️Jana’s total advance book grew 18.5% YoY (+6% QoQ) to 27,984 Cr thanks to the secured book. Secured book at 68% of the Jana total book report a growth of 35.8% YoY (+11.9% QoQ) to 19,085 Cr while Unssecured book down at 6.90% YoY and de-growth 4.80% QoQ to 8,899 Cr. Secured book contribution jump from 60% in Q3FY24 to 68% in Q3FY25 and management further planning to increased its weight in overall book.
➡️Healthy growth of secured book attributed to affordable housing (up 39.1% YoY) and Micro LAP (up 22.5% YoY) segment. This both combines cross the milestone of 11,000 Cr. 2W and gold loan also report a sound growth of 108.8% and 127.9% YoY but have low weightage in overall book. MSME and term loans to NBFCs grew 15.5% YoY and 33.4% YoY respectively.
➡️Deposit growth higher than advance growth at 24.4% YoY to 25,865 Cr while CASA as % of total deposit decline to 18.4% in Q3FY25 vs 18.8% in same quarter previous year.
| Book Growth (As on) | Q3FY25 | Q3FY24 | YoY (%) | Q2FY25 | QoQ (%) |
| Advance | 27,984 | 22806.96 | 18.50% | 26304.96 | 6% |
| Secured | 19,085 | 12252.57 | 35.80% | 16813.89 | 11.90% |
| Unsecured | 8,899 | 9513.031 | -6.90% | 9326.152 | -4.80% |
| Deposit | 25,865 | 19553.94 | 24.40% | 24752.81 | 4.30% |
NII grew single digit on solid advance growth while NIMs contact
➡️Interest income grew 13% YoY and remain flat on QoQ to 1,177Cr led by solid secured book growth while yield down 10 bps YoY (+20 bps QoQ) to 17.4%.
➡️NII grew 8% YoY to 593 Cr with support of advance growth while CoF expand and NIMs decline. On QoQ NII remain flat led to modest growth of book on QoQ and NIMs contraction.
➡️PPOP report -5% YoY and -7% to 279 Cr due to higher operating expenses. PAT down 18% YoY and sequentially 14% to 111 Cr led by higher provision growth.
| Years | Q3FY25 | Q3FY24 | YoY (%) | Q2FY25 | QoQ (%) |
| Interest income | 1,177 | 1,038 | 13% | 1,166 | 1% |
| Interest expenses | 585 | 490 | 19% | 572 | 2% |
| NII | 593 | 548 | 8% | 594 | 0% |
| Other income | 177 | 140 | 27% | 176 | 1% |
| Total Net income | 770 | 688 | 12% | 770 | 0% |
| Employee expenses | 309 | 245 | 27% | 296 | 5% |
| Other OpEx | 181 | 148 | 22% | 175 | 4% |
| Total Opex | 491 | 393 | 25% | 471 | 4% |
| PPOP | 279 | 295 | -5% | 299 | -7% |
| Provision | 174 | 161 | 8% | 210 | -17% |
| PBT | 105 | 135 | -22% | 89 | 18% |
| Tax expenses | 5 | 0 | -8 | -167% | |
| Tax rate | 5% | 0% | -9% | -156% | |
| PAT | 111 | 135 | -18% | 97 | 14% |
| PAT% | 8% | 11% | -29% | 7% | 13% |
| EPS | 10.49 | 18.3 | -43% | 9.28 | 13% |
| No. of equity shares | 10.47 | 7.36 | 42% | 10.45 | 0% |
Asset quality tempered on YoY basis
➡️Jana asset qaulity has been decline due to the stress in the MFI segment. GNPA/NNPA jump 65 bps/24 bps YoY while on QoQ down 15/4 bps 2.71%/0.91%. Net NPA has 82% secured loan which signifies higher chances of recovery.
| Asset Quality | Q3FY25 | Q3FY24 | YoY (bps) | Q2FY25 | QoQ (bps) |
| GNPA | 2.71 | 2.06 | 65 | 2.86 | -15 |
| NNPA | 0.91 | 0.67 | 24 | 0.95 | -4 |
Valuation and key metrics
➡️Currently the stock is trading at multiple of 1.25 price to book value and book value per share stood at 342 Rs. Yield decline 10 bps YoY (+20 bps QoQ) to 17.4% while CoF jump 40 bps YoY and down 5 bps on QoQ to 8.03%. 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 30 bps YoY and 10 bps QoQ to 7.6%. Return ratio dissapoint as ROE and ROA down by 670 bps and 20 bps YoY. Company’s capital position remain solid with 18.4% Capital adequacy ratio.
| Asset Quality | Q3FY25 | Q3FY24 | YoY (bps) | Q2FY25 | QoQ (bps) |
| Yield | 17.4 | 17.5 | -10 | 17.2 | 20 |
| CoF | 8.03 | 7.64 | 39 | 8.08 | -5 |
| NIMs | 7.6 | 7.9 | -30 | 7.7 | -10 |
| ROA | 1.5 | 1.7 | -20 | 1.2 | 30 |
| ROE | 13.5 | 20.2 | -670 | 10.2 | 330 |
| PCR | 66.9 | 6690 | 67.2 | -30 | |
| CAR | 18.4 | 16.3 | 210 | 18.8 | -40 |
| CASA | 18.4 | 18.8 | -40 | 20.1 | -170 |
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.
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