Capital Small Finance Bank Reports Positive Q2 Results, Maintains Low NPA Ratio

Capital Small Finance Bank, a smallcap private bank, has recently announced its financial results for the quarter ended September 2024. The company has shown positive performance in this quarter, with its score improving from 5 to 10 in the last 3 months.

One of the key factors contributing to this positive performance is the company's strong operating cash flow. In the last three years, Capital Small has consistently generated higher cash revenues from its business operations. Additionally, the bank's interest earned has also shown a steady increase each quarter in the last five quarters, indicating a positive sales trend in the near term.

Another positive aspect of the bank's financials is its low gross NPA (non-performing assets) ratio. In the last five quarters, the bank has maintained a low proportion of stressed loans, which is a good sign for its overall financial health. Furthermore, the net interest income for the quarter has also been the highest in the last five quarters, indicating a growth in the bank's core business.

On the other hand, the company's non-operating income, which is 57.97% of its profit before tax, is a cause for concern. This indicates that a significant portion of the bank's income is coming from non-business activities, which may not be a sustainable business model in the long run. Additionally, the non-operating income for the quarter has also been the highest in the last five quarters, which may not be a sustainable trend.

In conclusion, Capital Small Finance Bank has shown positive financial performance in the quarter ended September 2024. However, investors should keep an eye on the bank's non-operating income and its sustainability in the long run. Based on the recent financial results, MarketsMOJO has given a 'Hold' call for the stock.