Jana Small Finance Bank Share Price Surges Nearly 19% After Q3 Result

Shares of Jana Small Finance Bank Ltd. rose nearly 19% amid high volumes on Wednesday, after it reported its third quarter results. This comes after the management said that the challenges in the microfinance institutions business have bottomed out.

However, the bank's standalone net profit during the quarter ended December fell 17.8% to Rs 111 crore, compared to Rs 135 crore in the year-ago period.

The net interest income—the difference of interest earned, and interest paid— for the quarter rose 8% to Rs 593 crore. This compares to Rs 548 crore reported in the corresponding quarter of the previous fiscal.

Jana Small Finance Bank's asset quality improved marginally during the quarter under review, with the gross non-performing assets ratio declining to 2.8% from 2.97% in the July-September period. In absolute terms, the gross NPA slipped to Rs 758 crore from Rs 755 crore in the previous quarter.

The net NPA ratio contracted 50 basis points to 0.94% from 0.99% in the preceding quarter. In absolute terms, the net NPA slipped to Rs 251 crore from Rs 247 crore.

The bank's AUM for the nine months ending December 2024 rose 19% year-on-year to Rs 27,984 crore, with 68% assets assured, according to an exchange filing. While the secured growth for the first nine months was 29%, the unsecured assets saw a de-growth of 11%. The bank's largest business—affordable housing and micro LAP segment—accounted for 39% of the total AUM at Rs 11,000 crore.

"MFI business challenge have bottomed out, but we remain cautious. Focus on retail CASA will get further attention given price cut," said Ajay Kanwal, managing director and chief executive officer, Jana Small Finance Bank.

Shares of Jana Small Finance Bank rose as much as 18.79% to Rs 434.30 apiece, the highest level since Dec. 9. It pared gains to trade 14.84% higher at Rs 419.85 apiece, as of 9:54 a.m. This compares to a 0.23% advance in the NSE Nifty 50.

The stock has risen 14.04% in the last 12 months. Total traded volume so far in the day stood at 123 times its 30-day average. The relative strength index was at 57.

All three analysts tracking the company maintain a 'buy' rating, according to Bloomberg data. The average 12-month analysts' consensus price target implies an upside of 33.9%.