Utkarsh Small Finance Bank shares tumble 15% to all-time low after bank posts Rs 168-crore Q3 loss

Utkarsh Small Finance Bank

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The shares of Utkarsh Small Finance plunged nearly 15 percent in morning trade on February 17 to hit a new all-time low of Rs 24 per share. This comes after the bank reported a net loss of Rs 168 crore for Q3 FY25, marking a significant decline from the Rs 116 crore net profit reported in the year-ago period.

Utkarsh Small Finance released its results for the quarter which ended on December 31, 2024 in the post market hours of February 14. The stock saw a significant decline on February 17 morning as markets reopened after the weekend.

The bank's asset quality also saw a sharp deterioration. Its net non-performing assets (NPA) jumped multifold to Rs 457.69 crore in Q3 FY25, up from Rs 29 crore in Q3 FY24. Its net NPA margin meanwhile worsened to 2.5 percent.

Utkarsh Small Finance's net interest income marginally fell to Rs 480 crore during the reported quarter. It had earlier reported net interest income at Rs 482 crore in the corresponding quarter of the previous financial year.

Also read: RVNL shares drop 7% after firm's Q3 net profit declines 13% to Rs 311 crore

The bank's gross loan portfolio grew 16.2 percent on-year to Rs 19,057 crore, while deposits increased 34 percent on-year to Rs 20,172 crore, as on December 31, 2024.

Speaking about the results, Utkarsh Small Finance Managing Director and CEO Govind Singh said, "Operating environment remained difficult for micro-banking lending in Q3, FY25 on account of credit supply tightening for underlying micro-banking borrowers following guard rail norms, the impact of which is visible in higher provisioning in Q3, FY25. Though guard rail advisory has impacted disbursements also however it is structurally positive step for the sector, benefit of which will be seen soon. We are seeing stabilization of collection efficiency for regular bucket, overall stress level is also peaking out and expect improvement in collection efficiency in current quarter and first quarter of next financial year."

After hitting the fresh all-time low level, the stock recovered some losses to trade at Rs 25.44 apiece, as seen as 11 am. It is still nearly 10 percent lower that its previous closing price. The stock is currently over 61 percent lower than its 52-week-high level of Rs 61.97 apiece.