Quote on Suryoday SFB By Jyoti Roy, Angel Broking
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Below are Quote on Suryoday SFB By Mr. Jyoti Roy - DVP- Equity Strategist, Angel Broking Ltd
Suryoday Small Finance Bank is among the leading SFBs in India in terms of net interest margins, return on assets, yields and deposit growth and had the lowest cost-to-income ratio among SFBs in India in Fiscal 2020. Company has over a decade experience in serving customers in the unbanked and under-banked segments in India and promoting financial inclusion.
Over the years, it has diversified its loan portfolio to include non-micro banking loans thereby reducing dependence on micro banking business. Suryoday SFB has posted strong growth in NII of 72.1% CAGR between FY18-20 though 9MFY2021 numbers were adversely impacted due to the Ciovid-19 pandemic. While reported GNPA and NNPA stood at 0.8% and 0.3% at the end of Q3FY21, proforma GNPA and NNPA stood at 9.3% and 5.4% respectively.
However CAR of 41.1% at the end of 9MFY2021 provides some comfort. At the higher end of the price band the stock would be trading at P/BV of 2.25x fully diluted post issue book value of `136 per share. While we believe that valuations are reasonable asset quality will be an issue in the near to medium term and hence have a NEUTRAL rating on the issue.
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