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Axis Securities Report
Equitas Small Finance Bank Ltd.'s Q1 FY23 performance was below our estimates owing to lower other income, higher opex, and elevated provisions resulting in a miss on profit after tax.
Disbursements stood at Rs 3,238 crore (up 156% YoY, flat QoQ) aiding loan growth revival. Advances grew by 22% YoY, with growth driven primarily by home loans (up 79% YoY), microfinance (up 28% YoY), new commercial vehicles (up 28% YoY) and small business loans plus agri (up 18% YoY).
With the business activity picking up, the on-ground situation improving, and growth visibility emerging, Equitas SFB reiterated its growth guidance of clocking advances of ~30% (pre-Covid growth rate) in FY23.
The traction on the liability franchise remained strong aided by a strong current account and savings account deposits growth (up 55% YoY) with the CASA ratio remaining stable at ~52% QoQ.
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