Fedfina Q3 Results: Profit Rises 28% On Higher Income

Fedbank Financial Services Ltd. or Fedfina's third quarter net profit rose.

The company's standalone net profit increased 27.8% year-on-year to Rs 65.4 crore for the quarter-ended December, according to an exchange filing on Monday.

Fedfina Q3 FY24 Highlights

• Net profit rises 28% to Rs 65.4 crore (YoY).

• Total income up 34.7% at Rs 429.45 crore (YoY).

• Gross NPA: 2.19% vs 2.34% (QoQ).

• Net NPA: 1.66% vs 1.83% (QoQ).

Fedbank Financial Services is a retail-focused NBFC, targeting MSMEs and emerging self-employed individuals.

With 609 branches across 17 states and union territories, the asset under management was at Rs 10,710 crore, up 34% year-on-year in the December quarter. Mortgage loans accounted for half of the asset under management. About 85% of total AUM is secured.

Its disbursals also rose 24% year-on-year to Rs 3,344 crore in the reporting quarter.

On Nov. 30, the Federal Bank subsidiary listed at a discount of 1.4% over the issue price, at Rs 138 apiece on the National Stock Exchange. On the BSE, the stock debuted at Rs 137.75 apiece, a discount of 1.6%.

Federal Bank holds 61.7% stake in Fedbank Financial Services, followed by True North Fund VI and SBI Life Insurance Co. at 8.8% and 2.5%, respectively.

The fundraising through share sale was a mix of fresh issue of 4.29 crore shares, aggregating to Rs 600.7 crore; and an offer for sale of 3.52 crore shares worth Rs 492.26 crore.

The company aims to use the net proceeds from the fresh issue to augment tier-I capital base to meet its future capital requirements to grow the business.

As of Dec. 31, the NBFC's capital adequacy ratio stood at 25.79%. Its net worth improved to Rs 2,163.7 crore, from Rs 1,310 crore a year earlier.

The non-bank lender's loans to businesses rose to 16% in the December quarter, from 13% in the previous quarter. The share of gold loans in the AUM mix fell slightly during the quarter.

The net interest income rose 5% quarter-on-quarter to Rs 216.6 crore in the December quarter, which is 31% higher year-on-year.