Highlights
- The company has demonstrated strong growth momentum, with deposits expanding by 18% year-over-year in FY24, fueled by a healthy CASA ratio of 29.56%. This robust deposit base has supported a 20% year-over-year increase in net advances, positioning the company for further lending growth.
- The company has delivered impressive profitability, with net profit surging by 24% year-over-year in FY24, translating into a healthy net profit margin of 32.7%. This profitability is underpinned by improving efficiency, as evidenced by the decline in the cost-income ratio from 62.35% at the end of FY24 to 53.01% in Q2 FY25.
- The company is proactively addressing asset quality concerns, with both Gross NPA and Net NPA declining in recent quarters. This focus on asset quality is crucial for maintaining financial stability and mitigating risks associated with lending activities.
- The narrowing spread between the yield on advances and the cost of funds, reaching 3.51% in Q4 FY24, presents a potential challenge to profitability. The company will need to carefully manage its asset-liability mix, explore avenues to improve its pricing power, and potentially seek higher-yielding assets to maintain healthy margins.