Jana Small Finance Bank: PAT growth of 90% & NII growth of 32% in Q1-25 at a PE of 10
Guidance of 30-40%+ PAT growth in FY25. Deposit and AUM growth of 20% in FY25 with ROE of 19-21%
1. A Small Finance Bank
janabank.com | NSE : JSFB
60% of our loan book being classified as secured, primarily in the Home Loan and Loan Against Property (LAP) products.
2. FY21-24: PAT CAGR of 110% & Revenue CAGR of 20%
3. Strong FY24: PAT up 162% & Net Interest Income up 28% YoY
4. Q1-25: PAT up 90% & Net Interest Income up 32% YoY
5. Return ratios: Improving return ratios
6. Outlook: Guiding for 30-40% PAT growth in FY25
7. PAT growth of 90% & NII growth of 32% in Q1-25 at a PE of 10
8. So Wait and Watch
If I hold the stock then one may continue holding on to JSFB
JSFB has delivered a strong FY24 and followed it up with a strong Q1-25 which provides confidence in the managements ability to deliver on the guidance of FY25.
FY25 guidance looks conservative given the performance in FY24. AUM growth of 25% and Deposit growth of 38% in FY24 followed by ~20% growth in AUM & Deposits in FY25 looks conservative. However on a standalone basis the guidance for FY25 is strong.
9. Or, join the ride
If I am looking to enter JSFB then
JSFB has delivered PAT growth of 162% & NII growth of 28% in FY24 at a PE of 10 which makes valuations quite reasonable for the short term.
Outlook for PAT growth of 30-40% in FY25 at a PE of 10 makes the JSFB valuations quite reasonable from a longer term.
With a market cap of Rs 6874 cr against a net worth of Rs 3,577 cr as of Q4-24 end implies that JSFB is available a price to book of 1.8 which makes the valuations fairly valued in the short term but can be sustained over the longer term given the 30-40% growth in PAT expected for FY25
One needs to keep a watch on asset quality of JSFB even though NPA’s are trending down with 70%+ of GNPA covered by provisioning as indicated in the provisioning coverage ratio
GNPA and NNPA increase is event driven and seasonal
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