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Equitas Small Finance Bank has
reported 70% growth in net profit at Rs 198.12 crore for the quarter ended
September 2023 (Q2FY2024). The bank has posted healthy 26% growth in net
interest income (NII), while the core fee income of the bank also improved 25% in
Q2FY2024. The Net Interest Margin (NIM) of the bank eased to 8.43% in Q2FY2024
compared to 9.00% in the corresponding quarter of previous year.
On business front, the bank as has posted 39% growth
in business with strong 37% surge in loan book. The asset quality of the bank
was improved in Q2FY2024. Bank has reduced the credit to deposit ratio to 101.3%
at end September 2023 from 104.8% at end September 2022. However, the CASA
ratio of the bank has declined to 33.6% at end September 2023 from 48.0% at end
September 2022 due to sharp growth in the term deposit rates.
Asset quality improves: The bank has improved asset quality in Q2FY2024
with sale of bad debt to ARCs.
The fresh slippages of loans stood at Rs 257 crore
in Q2FY2024 compared with 214 crore in previous quarter and Rs 314 crore in the
corresponding quarter last year.
The recoveries of NPAs stood at Rs 167.92 crore,
upgradations at Rs 114.86 crore and the write-off of loans was at Rs 83.73 crore
in Q2FY2024.
The bank has conducted sale bad debt amounting
to Rs 162 crore ARCs in Q2FY2024.
Provision coverage ratio was steady at 57.72% at
end September 2023 compared to 57.79% a quarter ago and 50.49% a year ago.
The capital adequacy ratio of the bank stood at 21.3%
with Tier I ratio at 20.7% at end September 2023.
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Asset Quality
Indicators: Equitas Small Finance Bank
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Sep/23
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Jun/23
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Mar/23
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Dec/22
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Sep/22
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Variation
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QoQ
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YTD
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YoY
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Gross NPA (Rs Crore)
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660.50
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770.18
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723.96
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861.36
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870.26
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-14
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-9
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-24
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Net NPA (Rs Crore)
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279.29
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325.10
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312.02
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423.44
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430.88
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-14
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-10
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-35
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% Gross NPA
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2.27
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2.75
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2.76
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3.63
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3.91
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-48
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-49
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-164
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% Net NPA
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0.97
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1.18
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1.21
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1.82
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1.97
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-21
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-24
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-100
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% PCR
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57.72
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57.79
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56.90
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50.84
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50.49
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-7
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82
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723
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% CRAR - Basel III
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21.33
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22.06
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23.80
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24.28
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23.08
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-73
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-247
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-175
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% CRAR - Tier I -
Basel III
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20.65
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21.36
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23.08
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23.74
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22.55
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-71
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-243
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-190
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Variation in basis
points for figures given in percentages and in % for figures in Rs crore
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Business Highlights:
Healthy business growth: The business of the bank has increased 39% YoY
to Rs 62068 crore end September 2023, driven by 37% surge in advances to Rs 31229
crore. Deposits jumped 42% to Rs 30839 crore at end September 2023.
CASA deposits ratio declines: The CASA deposits of the bank fell -1% YoY to Rs
10349 crore at end September 2023. The current account deposits increased 30% to
Rs 814 crore, while saving account deposits declined -3% to Rs 9535 crore end
September 2023. The CASA ratio slipped to 33.6% at end September 2023 compared
to 48.0% at end September 2022, while declined from 38.4% a quarter ago. The
term deposits have zoomed 81% to Rs 20490 crore end September 2023.
Strong loan growth: Advances growth was driven by retail loans
rising 44% YoY to Rs 17599 crore at end September 2023, while credit to MSME
increased 27% to Rs 12588 crore at end September 2023. The corporate credit mainly
given to NBFCs has moved up 47% to Rs 1042 crore end September 2023.
Investment
book of the bank jumped 49% YoY
to Rs 8551 crore at end September 2023. Within the investment, the SLR
portfolio was at Rs 7892 crore and non-SLR at Rs 659 crore.
Margins declines: The bank has showed 142 bps YoY jump in cost of
deposits to 7.91%, while yield on advances increased only 31 bps YoY to 17.41% in
Q2FY2024. Thus, the NIM has declined 57 bps YoY to 8.43%.
Branch expansion: The bank has added 29 branches and 4 ATMs in
Q2FY2024, taking overall tally to 956 branches and 356 ATM`s end September
2023. The employee count of the bank has increased to 21862 end September 2023,
up 2900 over September 2022.
Book value of the bank stood at Rs 48.8 per share at end September 2023,
while the adjusted book value (net of NNPA and 10% of restructured advances)
was Rs 46.4 per share at end September 2023.
Quarterly Performance
NII rises on strong loan growth: Bank has recorded 36% increase in the interest
earned at Rs 1358.99 crore, while interest expenses increased 51% to Rs 593.41 crore
in Q2FY2024. NII improved 26% to Rs 765.58 crore in the quarter ended September
2023.
Healthy growth in the core fee income: Bank has posted strong 25% growth in core fee
income to Rs 105 crore, while the treasury income jumped 157% to Rs 18 crore
and other income moved up 58% to Rs 38 crore, leading to 25% jump in the
overall non-interest income to Rs 181.37 crore in the quarter ended September
2023.
Expenses ratio declines: The operating expenses of the bank increased 20%
to Rs 616.77 crore, as other expenses moved up 20% to Rs 285.26 crore, while
employee expenses increased 21% to Rs 331.51 crore in Q2FY2024. Cost to income
ratio eased to 65.1% in Q2FY2024 compared with 67.9% in Q2FY2023, helping the
Operating Profit to increase 36% to Rs 330.18 crore.
Provisions and contingencies decline: The bank has showed -30% decline in provisions
to Rs 63.20 crore.
Effective tax rate rose to 25.8% in Q2FY2024 from 23.5% in Q2FY2023. Net
Profit jumped 70% YoY to Rs 198.12 crore during quarter ended September 2023.
Financial Performance H1FY2024:
Bank has posted 82% increase in net profit to Rs
389.33 crore in the half year ended September 2023 (H1FY2024). The net interest
income increased 27% to Rs 1508.72 crore, while non-interest income moved up 27%
to Rs 352.74 crore, pushing up net total income by 27% to Rs 1861.46 crore in
H1FY2024. The operating expenses increased 27% to Rs 1219.16 crore, while
provision and contingencies declined 47% to Rs 123.26 crore, allowing profit
before tax to increase 86% to Rs 519.04 crore in H1FY2024. The cost-to-income
ratio rose to 65.5% in H1FY2024 compared to 65.2% in H1FY2023. An effective tax
rate increased to 25.0% in H1FY2024 compared to 23.5% in H1FY2023. The net
profit has jumped 82% to Rs 389.33 crore in H1FY2024.
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Equitas Small Finance Bank:
Results
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Particulars
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2309 (3)
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2209 (3)
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Var %
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2309 (6)
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2209 (6)
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Var %
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2303 (12)
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2203 (12)
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Var %
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Interest Earned
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1358.99
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1002.37
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36
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2612.95
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1942.76
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34
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4161.88
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3459.67
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20
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Interest Expended
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593.41
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392.68
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51
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1104.23
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752.50
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47
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1617.15
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1421.13
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14
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Net Interest Income
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765.58
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609.69
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26
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1508.72
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1190.26
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27
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2544.73
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2038.54
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25
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Other Income
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181.37
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145.03
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25
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352.74
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278.25
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27
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669.59
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537.56
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25
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Net Total Income
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946.95
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754.72
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25
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1861.46
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1468.51
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27
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3214.32
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2576.10
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25
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Operating Expenses
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616.77
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512.40
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20
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1219.16
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958.01
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27
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2038.31
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1704.15
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20
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Operating Profits
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330.18
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242.32
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36
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642.30
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510.50
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26
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1176.01
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871.95
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35
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Provisions &
Contingencies
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63.20
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90.10
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-30
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123.26
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231.70
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-47
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407.20
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493.84
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-18
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Profit Before Tax
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266.98
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152.22
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75
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519.04
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278.80
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86
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768.81
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378.11
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103
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Provision for tax
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68.86
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35.80
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92
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129.71
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65.38
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98
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195.21
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97.38
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100
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PAT
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198.12
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116.42
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70
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389.33
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213.42
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82
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573.60
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280.73
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104
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EPS*(Rs)
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7.1
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4.2
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6.9
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3.8
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5.1
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2.5
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Adj BV (Rs)
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46.4
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31.6
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46.4
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31.6
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43.6
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29.1
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* Annualized on current equity of
Rs 1121.73 crore. Face Value: Rs 10, Figures in Rs crore
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Source: Capitaline Corporate
Database
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