PL First Cut - Canfin Q1FY24 - Earnings beat led by higher NII/NIM and lower provisions; miss on asset quality

PL First Cut – Canfin Q1FY24 – Gaurav Jani – Research Analyst, Prabhudas Lilladher Pvt Ltd

Canfin Q1FY24 – Earnings beat led by higher NII/NIM and lower provisions; miss on asset quality

♦ NII was a beat at Rs2.85bn (PLe Rs2.67bn) as NIM surprised positively at 3.80% (PLe 3.56%)

♦ Yield improvement outpaced funding cost rise leading to 21bps QoQ NIM increase

♦ Loan growth came in exactly as expected at 18% YoY to Rs325bn

♦ Disbursals were a bit lower Rs19.7bn (PLe Rs20.3bn) that was offset by softer repayments at Rs10.24bn (PLe Rs11.05bn)

♦ Other income was a miss at Rs60mn (PLe Rs85mn) due to lower fee income although opex was in-line at Rs435mn (PLe Rs429mn)

♦ PPoP at Rs2.48bn was 6.3% higher to PLe led by higher NII

♦ Asset quality deteriorated as GNPA/NNPA rose by 8bps each QoQ to 0.63%/0.34% while PCR dipped QoQ to 46.6% from 52.3%

♦ However, provisions were lower Rs137mn (PLe Rs200mn).

♦ PAT was a beat at Rs1.84bn (PLe Rs1.6bn) driven by stronger NII and lower provisions

♦ At CMP, the stock trades at 2.2x FY25E ABV.