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Suryoday – ‘Sunrise’ in Sanskrit, signifies new dawn. It has received a Micro-Finance license from RBI in 2008, and within 8 years converted into a successful Small Finance Bank.

FY19-20 Performance:

(i) The company has shown exemplary performance in the year FY19-20 wherein, it has clocked Revenue of 854 Cr and PAT of 110 Cr as compared to 597 Cr and 86 Cr last year, respectively, representing a stupendous growth.

Revenue contribution (Cr):

Year Retail Treasury Corporates
FY19 590 44 8.15
FY20 813 70 28

(ii) The loan book has grown from 3761 Cr to 5264 Cr in FY20.

Year Retail Treasury Corporates
FY19 1623 1239 11
FY20 2897 1347 51

(iii) NIM – It represents how much is the net earning of the bank on loans given in the market.

Formula- ( Interest Earned- Interest Expensed)/Loan book

Year Interest Earned Interest Expensed Loan book NIM
FY19 530 191 2769 12.24%
FY20 766 276 3531 13.88%

The NIM has increased from 12.24% in FY19 to 13.88% in FY20- Good Sign

Analytical Ratios:

Ratios 2020 2019
CAR 29.57% 35.02%
D/E 3.86 3.09
G.NPA 2.79% 1.81%
N.NPA 0.57% 0.44%
ROE 11.21% 14.26%
ROA 2.53% 2.58%

(a) ROE has reduced in FY20 to 11.21% from 14.26%.

(b) D/E is manageable.

(c) G.NPA and N.NPA are under control.

Business Impact Due to COVID-19

As per management commentary, the loan disbursement in the lock-down period is sluggish and likely to improve as lock-down is removed in phases.

The Bank has made an additional provision of 65.99 crores (Retail banking  57.43 crores and Corporate banking  8.56 crores) for the potential impact of CoVID-19 as of March 2020. This provision is equivalent to 60% of FY20 PAT.

UnlistedZone Review:

The two important parameters to check the performance of the bank is loan growth and ROE.

Loan growth( in FY20) = 27% (Excellent)

ROE (in FY20) = 11.48% (Good)

Valuation– The book value of Suryoday Small Finance Bank in FY20 stands at 123 per share.

The latest price of the Suryoday Small Finance Bank in unlisted market is 260.

P/B = 2.11x ( Cheaper than AU Small and Ujjivan Small bank)

Check out here the comparison of Suryoday Small Finance Bank with listed peer i.e. AU Small Finance Bank and Ujjivan Small Finance Bank

Last 5 years performance of the Suryoday Small Finance Bank

Particulars(Cr) FY15 FY16 FY17 FY18 FY19 FY20
Advances 582 983 834 1596 2711 3531
Gross NPA 0.13% 0.18% 6.15% 3.15% 1.81% 2.79%
Revenue 180 225 255 325 599.25 854
PAT 19.9 27.14 15.1 10.1 86.6 110

The IPO as per RBI regulation was supposed to come in 2020. However, due to COVID-19 impact, it may be postponed to next year.

Source: Audited Financial Results of FY19-20

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