Dhanlaxmi Bank's Q2 FY25 Financial Results Show Mixed Performance, Gross NPA Decreases

Dhanlaxmi Bank, a private microcap bank, has recently declared its financial results for the quarter ending September 2024. According to the data released on October 17, 2024, the stock call for Dhanlaxmi Bank by MarketsMOJO is ‘Sell’.

The bank has shown a flat financial performance for the quarter, with a slight improvement in its score from -13 to -4 in the last three months. However, there are some positive aspects to the bank’s performance in the quarter.

One of the key highlights is the bank’s Gross NPA (Non-Performing Assets) which has been consistently decreasing in the last five quarters, with the lowest at 3.82%. This indicates that the proportion of stressed loans given by the bank is falling. Additionally, the Credit Deposit Ratio has also shown a positive trend, with the highest at 73.25% and a growth in the last four periods. This shows that the bank has been creating higher loans against its deposits, leading to higher revenue generating assets.

The bank has also seen a positive trend in its Interest Earned, with the highest at Rs 328.83 crore in the last five quarters. This indicates a positive sales trend in the near term. The Profit After Tax (PAT) has also shown a positive trend, with the highest at Rs 25.81 crore in the last five quarters. This shows that the bank has been able to increase its profitability and create higher earnings for its shareholders. The Earnings per Share (EPS) has also increased, with the highest at Rs 1.02 in the last five quarters.

However, there are some areas where the bank needs to improve. The Profit Before Tax less Other Income (PBT) has fallen at -766.09% Year on Year (YoY), with a negative trend in the near term. The Operating Cash Flow has also shown a decline, with the lowest at Rs 17.29 crore in the last three years. This indicates that the bank’s cash revenues from business operations are falling. The Non Operating Income, which is 159.12% of PBT, is also a concern as it shows that the bank’s income from non-business activities is high, which may not be a sustainable business model. The Non Operating Income has also increased in the last five quarters, with the highest at Rs 51.81 crore.

Overall, Dhanlaxmi Bank’s financial performance for the quarter ending September 2024 has been mixed, with some positive and negative aspects. Investors are advised to carefully analyze the data and make an informed decision.