Equitas Small Finance Bank shares jump 3% after a change in management

Shares of Equitas Small Finance Bank gained over 3 percent on December 13 after it announced a key change in the top management. The lender in an exchange filing informed about the appointment of senior managerial personnel (SMP) Ashwini Biswal as its next chief compliance officer (CCO).

Biswal will take over the role on January 28, 2024, for five years, the micro-financer said.

At 9:38am, the Equitas Small Finance Bank shares traded 3.27 percent higher at Rs 107.30 on the National Stock Exchange. So far this year, the stock has surged nearly 78 percent, massively outperforming benchmark Nifty 50 which has risen 15 percent during this period.

Also Read | Equitas Small Finance Bank appoints Ashwini Biswal as next CCO

Ashwini Biswal will replace Srinivasan Krishnamurthy Purohit, whose tenure as the CCO will expire on January 27. The bank said he would be assigned a new charge following the completion of his term. Biswal has been associated with Equitas since April 2017 and is currently in senior vice president grade.

For the quarter ended September 2023, Equitas had reported a net profit of Rs 198 crore, up 70 percent from Rs 116.4 crore reported year ago. The Chennai-based private lender’s net interest income had grew 25 percent on-year to Rs 765.6 crore.

Domestic brokerage YES Securities is bullish on Equitas Small Finance Bank, and recommended a buy rating on the stock in its research report dated October 21, 2023.

“With valuation still palatable (1.8x P/ABV and 10x P/E on FY25E), we maintain the ‘buy’ rating with an increased 12-month target price of Rs 120. Notably, Equitas SFB’s valuation is at par with other SFBs having much less diversified and secured loan book and a less developed deposits franchise,” it said.

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Analysts see secular Return on Equity (RoE) improvement over FY24-26 aided by growth, partial margin recovery and operating leverage. They expect earnings CAGR of more than 30 percent over the aforesaid period.

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