Active Stocks
Thu Mar 28 2024 15:59:33
  1. Tata Steel share price
  2. 155.90 2.00%
  1. ICICI Bank share price
  2. 1,095.75 1.08%
  1. HDFC Bank share price
  2. 1,448.20 0.52%
  1. ITC share price
  2. 428.55 0.13%
  1. Power Grid Corporation Of India share price
  2. 277.05 2.21%
Business News/ Companies / Company-results/  SKS Microfinance posts Rs56.8 crore net profit in Sep quarter
BackBack

SKS Microfinance posts Rs56.8 crore net profit in Sep quarter

Microlender benefited from higher demand for loans outside its home base of Andhra Pradesh

SKS Microfinance swung to a profit in the fiscal third quarter of 2012-13 after reporting losses for seven consecutive quarters. Photo: MintPremium
SKS Microfinance swung to a profit in the fiscal third quarter of 2012-13 after reporting losses for seven consecutive quarters. Photo: Mint

Hyderabad: SKS Microfinance Ltd, India’s only listed microlender, on Monday posted a net profit of 56.75 crore for the quarter ended 30 September as it benefited from higher demand for loans outside its home base of Andhra Pradesh.

SKS had reported a profit of 16.34 crore in the same period last year. Revenue rose 6.3% to 190.1 crore.

The microlender swung to a profit in the fiscal third quarter of 2012-13 after reporting losses for seven consecutive quarters.

Its loan portfolio, excluding the states of Andhra Pradesh and Telangana, grew 50% to 3,043 crore compared with 2,029 crore in the same period the previous year, the company said.

SKS said it plans to grow its loan portfolio by 40% to 4,000 crore by the end of this financial year. The company said it set a profit target of 150 crore.

SKS said it has “an un-availed deferred tax benefit of 522 crore available to offset tax on future taxable income".

Loan disbursements grew 73% to 1,693 crore in the second quarter from 978 crore in the previous year. SKS said the average cost of borrowing reduced to 12.2% in the first half of 2014-15 from 12.7% in the previous year after it raised 400 crore in May through a qualified institutional placement and the improvement of the company’s credit rating.

Net interest income grew 63% to 110 crore in the September quarter from 68 crore in the year earlier.

As of September, SKS had a net worth of 951 crore and capital adequacy of 33.2%. Cash and cash equivalents stood at 530 crore. SKS said its collection efficiency stood at 99.8%.

The company said it plans to increase its earnings from gold loans and loans to buy mobile phones by up to 20% in the coming months. As of September, just 2% of assets were deployed for such businesses.

The company is also planning to offer home loans with assistance from Housing Development Finance Corp. Ltd and financing for water purifiers and solar lamps.

SKS returned to profitability in the year ended March, registering a profit of 69.9 crore after two consecutive years of losses because of an industry-wide crisis sparked by an October 2010 law put in place by Andhra Pradesh, the biggest market for loans made to low-income earners.

The law sought to rein in lending by microfinance institutions (MFIs) following reports that coercive loan recovery practices were driving over-extended borrowers in the southern state to commit suicide.

Since the crisis erupted, SKS has written off loans totalling 1,362 crore and pared its staff in the state to 1,200 from around 7,000 prior to the crisis. SKS Microfinance has also scaled down the number of branches in Andhra Pradesh to 120 from 550.

Shares of SKS rose 8.88% to close at 312.80 on BSE, on a day the benchmark Sensex gained 1.23% to 26,429.85.

Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!

Catch all the Corporate news and Updates on Live Mint. Download The Mint News App to get Daily Market Updates & Live Business News.
More Less
Published: 20 Oct 2014, 08:06 PM IST
Next Story footLogo
Recommended For You
Switch to the Mint app for fast and personalized news - Get App

Chat with MintGenie