SKS Microfinance shares touch 52 week-high with a 51 per cent increase in Net Profit

SKS Microfinance (SKSMICRO) declared its June quarter result on 22nd July 2015. The finance company reported a growth of 21.88 per cent in total income, which stood at Rs 240.86 crore in Q1FY16 as compared to Rs 197.62 in Q4FY15. Its total expenditure increased by 8.79 per cent to touch Rs 101.39 crore in Q1FY16 as compared to the previous quarter. SKSMICRO's total expenditure increased mainly due to a 18.04 per cent growth in the employees cost. There has been a 32.77 per cent reduction in provisions in June 2015 quarter as compared to last quarter.

EBITDA of SKSMICRO boosted by 33.57 per cent to reach Rs 139.47 crore in Q1FY16 on sequential basis. The company's PBT too increased by 71.17 per cent from Rs 46.44 crore in Q4FY15 to Rs 79.49 crore in Q1FY16, mainly due to 46.22 per cent increase in other income of the company compared to previous quarter. Its Net Interest Income (NII) increased by 27.67 per cent during the quarter. Its PAT rose by 50.84 per cent to Rs 61.15 crore in Q1FY16 as compared to Rs 40.54 crore in Q4FY15, reduced cost to income and stable credit cost boosted the profitability.

SKSMICRO's EBITDA margin expanded by 507 basis points to 57.91 per cent in Q1FY16 and PAT margin expanded by 488 basis points to reach 25.39 in Q1FY16 as compared to the previous quarter. The company has provided for Minimum Alternate Tax (MAT) liability of Rs 18.34 crore for Q1FY16, it also has MAT credit of Rs 21 crore will be available to offset tax on future taxable income.

SKSMICRO reported a 15 per cent growth in its gross loan portfolio excluding the states of Andhra Pradesh (AP) and Telangana to Rs 4797 crore compared to previous quarter and loan disbursements increased by 105 per cent on a year on year basis to Rs 2377 crore in Q1FY16 compared to Rs 1160 crore in Q1FY15. The SKSMICRO's non-AP collection efficiency declined by 10 basis points from 99.8 per cent to 99.7 per cent as a result the asset quality declined by 10 per cent and net NPA (Non performing Assets) stood at Rs 2.2 crores in Q1FY16 as against Rs 1.3 crore in Q4FY15.

In response to the good result the shares of SKSMICRO jumped about 6.85 per cent to touch a one year high of Rs 573.85 on Thursday (23rd July), which closed yesterday at Rs 537.05 in the BSE.