Ujjivan Financial Services Q1 net loss at Rs 75 cr

We are in the last phase of the September quarter earnings season, and the results announced by the BSE 500 companies so far have shown signs of a sharp recovery, as compared to the June quarter, when the economic activity in the country was compromised due to lockdown in various regions. From the BSE 500 list, 216 companies have announced their September quarter results so far. We excluded banking and financial companies.  Along with the index stocks we also analyse each sector quarterly earnings. (Data Source: ACE Equity)

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Ujjivan Financial Services reported a consolidated net loss of Rs 74.94 crore for the June quarter on higher credit cost and only a moderate growth in revenue.

An increased level of bad assets also impacted the bottomline.

The company had reported a net profit of Rs 71.36 crore during the corresponding April-June quarter of 2016-17.

Total income of the company grew by a mere 8.9 per cent to Rs 358.64 crore during the reported quarter from Rs 329.32 crore in the same period year ago.

Company's net interest income decreased by 19.66 per cent to Rs 138.22 crore for the June quarter of 2017-18. Also, the net interest margin shrank to 9.23 per cent from 12.96 per cent a year ago.

Cost-to-income ratio, on the other hand, increased to 78 per cent from 45.6 per cent in June 2016 quarter.

Sudha Suresh, MD and CEO, Ujjivan Financial Services said, "Our cost to income in absolute amount is in line with the expectation, however the ratio in percentage terms is higher due to the low base impact of flat loan book and reversal of interest income due to NPA. We expect cost to income ratio to consistently come down during the year."

The gross non-performing assets (NPAs) and net NPAs stood at 6.16 per cent and 2.30 per cent respectively as sticky November-January (demonetisation period) overdues rolled over to higher buckets, the company said.

Ujjivan made provisions of Rs 150 crore for first quarter of this fiscal, including Rs 43 crore additional provision to cover hardcore NPAs of November-January period.

"We have ensured 100 per cent provision of the hard core NPAs of November, December and January loan portfolio amounting to Rs 150 crore. We have fully dedicated teams engaged on recovery at branches in affected states to optimise overdue collections," Samit Ghosh, MD and CEO, Ujjivan Small Finance Bank said.

"In addition we have set up specialised collection teams focused on overdues over 90 days. This is yielding good results as shown with overall reduction in PAR in the quarter," Ghosh said.

Ujjivan Small Finance Bank, that began operations in February this year, is a fully-owned subsidiary of Ujjivan Financial Services.