Utkarsh Small Finance Bank Reports Negative Q2 Results, Sales Show Positive Growth

Utkarsh Small Finance Bank, a smallcap private bank, recently announced its financial results for the quarter ending September 2024. The stock has been given a 'Sell' call by MarketsMOJO.

According to the financials, the bank has seen a negative performance in the second quarter of FY24-25, with a score of -12 compared to 9 in the previous quarter. However, there are some positive aspects to the bank's performance.

The net sales for the quarter were at a record high of Rs 986.95 crore and have been growing consistently for the past five quarters. This indicates a positive trend in the bank's sales in the near term.

On the other hand, the profit before tax (PBT) less other income has fallen by -148.0% compared to the average PBT of the previous four quarters. The same trend can be seen in the profit after tax (PAT), which has fallen by -61.0% compared to the average PAT of the previous four quarters. This shows a negative trend in the bank's profitability in the near term.

The operating profit to interest ratio for the quarter was at its lowest in the past five quarters, indicating a deteriorating ability to manage interest payments. The interest cost has also risen by 20.93% in the previous half-year period, which signifies increased borrowings.

The bank's operating cash flow for the past three years has been at its lowest, indicating a decline in cash revenues from business operations. The PBT less other income for the quarter was also at its lowest in the past five quarters, showing a negative trend in the near term.

The non-operating income for the quarter was 150.71% of the PBT, which indicates a high income from non-business activities. This may not be a sustainable business model for the bank.

Lastly, the earnings per share for the quarter were at its lowest in the past five quarters, which shows a decline in profitability and lower earnings for shareholders.

Overall, the financial results for the quarter ending September 2024 for Utkarsh Small Finance Bank have been negative, with some positive aspects in terms of sales growth. Investors are advised to carefully consider these factors before making any investment decisions.