Bharat Financial

The company announced a net profit at Rs.16 crore in Q2FY14, its fourth consecutive quarter of profit post its turnaround in Q3FY13 with a profit of Rs. 1.2 crore. NII rose 7% (YoY) at Rs. 68 crore as loan disbursements registered an 18% growth during the quarter. The company, post the debacle has been concentrating on non-Andhra Pradesh (AP) portfolio and this, in current Q2 grew by 1.3%. In Q3FY11, the AP portfolio stood at Rs.1431 crore and currently it hardly exists and whatever little is there is fully provided for. Its draw downs increased by 370% at Rs. 1,010 crore in Q2FY14 up from Rs. 215 crore in Q1FY14 (Rs. 405 crore in Q2-FY13). It has also rationalized its branch network and personnel headcount. Branches have been cut down by 48% since Q3FY11 and headcount is down 64% and this has brought down the personnel cost down by 56%.

Its credit cost has come down sequentially from Rs.11 crore to Rs.4 crore in current Q2. Net worth is up from Rs.395 crore to Rs.411 crore and CAR, which as per RBI has to be at 15%, is currently at 31%. Cash and bank balance too has improved from Rs.310 crore to Rs.630 crore (QoQ). Collection efficiency stands at 99.9%.And this is reflected in the asset quality with Gross NPA and Net NPA both stand at 0.2% (0.3% in Q1). The entire net provisioning of Rs. 4 crore in Q2-FY14 is on standard assets. The un-availed deferred tax benefit stands at Rs. 574 crore and will be available to offset tax on future taxable income. Given the carried forward tax loss, no tax provision was required in this quarter. FII holding in the stock at the end of Q2 stands at an all-time high at 36.90% and this is probably after the appointment of Jack Trout for its re-branding and repositioning, which seems to have instilled some faith. Currently 48 FIIs have a holding in SKS. The company had made an IPO at a price of Rs.985/share and got listed at Rs.1000 but got butchered post the crisis.