BHARAT FINANCIAL INCLUSION

Bharat Financial Inclusion which is the new name for SKS Micro hit a new 52-week high to celebrate its performance for Q1FY17. It posted an almost four times or 287% (YoY) jump in its net profit at Rs.236 crore on a 53% rise in total income at Rs.369 crore. This surge in the net profit was thanks mainly to the MAT credit of Rs.97 crore. But even if we remove this tax credit advantage, the surge in bottomline has been excellent – with tax credit the net profit rose 128%, which is indeed a big deal.

The other operating metrics of the company have also been good. Its weighted average cost of borrowing reduced to 10.7%, down marginally sequentially from 11.1% and from 11.9% on YoY. It continues to maintain its lead as the most efficient microfinance institution in the world, post its distinction in November 2015 of becoming the first private sector MFI in the world to charge a sub-20% interest rate 19.75% which is the lowest interest rate to date.

During Q1FY17, the company added 7.7 lakh borrowers and ended the quarter with a borrower base of 50.9 lakhs (10% increase QoQ and 38% increase YoY). Employee strength increased to 14,559. Loan disbursements increased by 59% year-on-year to Rs. 3,769 crore. Its non-AP Portfolio grew by 76% (YoY) and 10% (QoQ) to Rs.8,463 crore  as of June 30, 2016.

Its recovery is very good – Gross NPA in current Q1 stood at 0.1% and Net NPA at 0.03% thus collection efficiency is at 99.8%. Provisions and write-offs though YoY has risen 67% at Rs.12 crore, sequentially it is down 14%.

The company has said that it has an un-availed deferred tax benefit of Rs. 308 crore which will be available to offset tax on future taxable income.