SKS Micro finance jumps, MFI upgrades FY16 PAT guidance

SKS Micro finance (SKS) is a non banking finance company. The company is engaged in providing micro finance services to individuals from poor segments of rural India. The Company offers people access to basic financial services, such as loans, savings, money transfer services and micro insurance.

Recently SKS Micro Finance announced its Q2 FY16 results, wherein its total income is increased by 21 per cent to RS 291 crore compared to Rs 241 crore in Q1FY16. Its total expenses slightly increased by 3.72 per cent to Rs 106 crore on quarterly basis. The EBITDA of the company rose by 34 per cent to Rs 187 crore, EBITDA margin expanded by 627 basis points to 64.18 per cent on Q-o-Q basis.

The profit before Other Income. , Int., Excpt. Items & Tax increased by 33.64 per cent to Rs 185 crore on quarterly basis. The other income of SKS decreased during the quarter by 21 per cent to Rs 33 crore. The finance costs increased by 16 per cent to Rs 117 crore on quarterly basis. The tax expenses increased by 27 per cent to Rs 23 crore Q-o-Q. The net profit of SKS micro finance increased by 27.31 per cent to Rs 77.86 per cent compared to Rs 61 crore on quarterly basis.

During the quarter, the company reduced interest rate charged to borrowers from 22 per cent to 20.75 per cent on income, with this reduction, SKS continues to charge the lowest rate among Indian MFIs .

SKS also originated Rs. 237 Crore loans under managed portfolio in Q2FY16. SKS's Non-AP (Andra Pradesh) portfolio grew by 14 per cent to Rs 5462 crore on quarterly basis. Loan Disbursement stood at Rs 2665 crore in Q2FY16 grew by 12 per cent. Q-o-Q. PAT Guidance for FY16 increased to Rs.290 crore from earlier guidance of Rs 235 crore.

SKS's FII holdings increased by 505 basis points to 47.49 per cent and DII holdings reduced by 171 basis points to 16.69 per cent as on 30th September 2015. Today, SKS Micro Finance after a good result announcement trading at Rs 451, 0.5 per cent higher.