Why is ESAF Small Fin falling/rising?

Jul 10 2025 10:46 PM IST
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As of 10-Jul, ESAF Small Finance Bank Ltd's stock price is at 34.60, up 2.55%, but it has a year-to-date decline of 17.70% and an annual drop of 33.35%. Despite a short-term increase, the bank faces significant financial challenges, including a 0% Capital Adequacy Ratio and negative profit growth over the last five quarters, leading to a lack of investor confidence.
As of 10-Jul, ESAF Small Finance Bank Ltd's stock price is currently at 34.60, reflecting an increase of 0.86 or 2.55%. The stock has outperformed its sector today by 2.99%, and it is trading higher than its 5-day, 20-day, 50-day, and 100-day moving averages, although it remains below its 200-day moving average. Despite this positive short-term movement, the stock has shown a year-to-date decline of 17.70% and a significant annual drop of 33.35%. The company has been facing severe challenges, including a low Capital Adequacy Ratio of 0%, a high Cost to Income ratio of 75.58%, and negative net profit growth. Furthermore, the bank has reported negative results for the last five consecutive quarters, with a substantial decrease in both profit before tax and profit after tax compared to previous averages.

In the broader market context, the stock's performance over the past week shows a slight gain of 0.61%, while the benchmark Sensex has seen a minor decline of 0.06%. However, over the past year, ESAF Small Finance Bank has significantly underperformed the market, which has generated returns of 1.46%. The lack of domestic mutual fund investment, which stands at 0%, indicates a lack of confidence in the company's prospects, further contributing to its negative performance. Overall, while there is a short-term uptick in the stock price, the underlying financial issues and poor long-term growth prospects continue to weigh heavily on investor sentiment.
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