Our 6th company in the Series of Best Stocks Below Rs. 100 is Equitas Small Finance Bank Ltd.
This company is good for investing purpose or not ?
Let’s start with the Company profile
Company Profile :
Equitas Small Finance Bank Limited’s lines of business include Micro and Small Enterprise and Corporate Banking, Emerging Enterprise Banking, Inclusive Banking, Consumer Banking and Outreach Banking.
Now Let’s check the important fundamental figures of this company. This is a small cap company with Market Cap ₹6,873cr. We can check more fundamental details below in depth:
Company Fundamental Detail :
PE Ratio: 17.89
Sector PE Ratio: 27.34
PE Ratio of this company is low but better than Sector’s PE. So it’s a Good PE than the peers of this company.
PB Ratio : 2.02
Sector PB Ratio: 2.33
PB Ratio of this company is low than Sector’s PB ratio. So it’sGood PB than the peers of this company.
Dividend Yield : 0%
Sector Dividend Yield : 0.53%
Dividend Yield of this company is zero. No Dividend is provided by this company.
ROE: 11.31%
ROCE: 9.53%
ROE (Return on equity) and ROCE (Return on capital equity) is Average
According to above data, this company is looking fundamentally average. Now We’ll check the company Financially data:
Company Financial Detail
| Year | Revenue(cr.) | Profit(cr.) |
| 2021 | 3,612.46 | 384.22 |
| 2020 | 2,927.79 | 243.63 |
| 2019 | 2,394.83 | 210.55 |
| 2018 | 1,783.93 | 31.83 |
You can see the company growth clearly in the above table, in 2019 Net profit was 210.55 Cr. only and in 2020, It increased to 243.63 Cr. and in 2021, it is increased to 384.22 Cr.
We should check now liabilities of company also in the below table
Total Current & Non Current Liabilities
| 2021 | 2020 | 2019 | 2018 |
| 21,323.46 | 16,554.10 | 13,510.42 | 11,269.64 |
Liabilities of a company refers to the debt of that company. We should also aware the debt of company. In 2021 , Company have 21,323.46 Cr. debt.
Let’s check the Free Cash flow of the company
Free Cash flow
| 2021 | 2020 | 2019 | 2018 |
| 1,993.96 | 365.25 | 1,747.66 | 131.47 |
Asset Level: Equitas Small Finance Bank Ltd Assets to Equity ratio (7.3x) is low.
Allowance for Bad Loans: Insufficient data to determine if Equitas Small Finance Bank Ltd has a sufficient allowance for bad loans.
Low Risk Liabilities: Equitas Small Finance Bank Ltd reports no customer deposits, 100% of its liabilities are made up of higher risk sources of funding.
Loan Level: Insufficient data to determine if Equitas Small Finance Bank Ltd has an appropriate level of Loans to Assets ratio.
Low Risk Deposits: Equitas Small Finance Bank Ltd reports no customer deposits, loans are made up entirely of externally borrowed funds.
Level of Bad Loans: Insufficient data to determine if Equitas Small Finance Bank Ltd has an appropriate level of bad loans.
Share Holding Pattern
| Promotor Holding | Foreign Institution | Mutual Fund | Other Domestic Institutions | Retail & Others | |
| Jun 2021 | 81.75% | 0.51% | 8.04% | 5.58% | 4.12% |
| Mar 2021 | 81.98% | 1.02% | 5.87% | 2.05% | 9.08% |
| Dec 2020 | 82.05% | 1.34% | 4.63% | 2.40% | 9.58% |
| Sep 2020 | 82.05% | 1.30% | 3.07% | 2.67% | 10.91% |
Above table showing there is no big change in Promotors holding which is 81.75% in June 2021. FIIs invested in June 2021 with 0.51% and retail investor is 4.12%.
Now We’ll check the return of the company, This company started from Rs. 32.70 at 4 Nov 2020. This company given 83.08% returns in last 1 year from 2020 to 9 Sep 2021.
Investment Checklist for Equitas Small Finance Bank Ltd.
- The company is currently profitable
- Earnings have grown by 34.3% per year over past 5 years
- They do not pay a dividend
- Share price has been stable over the past 3 months
- Profit margins improved or Equitas Small Finance Bank Ltd became profitable
- At least 3 years of financial data is available
- No concerning events detected
- Revenue is meaningful (₹23B)
- Market cap is meaningful (₹69B)
- Equitas Small Finance Bank Ltd does not have negative shareholders equity.
According to its historical performance we can predict stock target.
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Entry Buying Zone : Premium members can see only
Target: Premium members can see only
Time Horizon:Premium members can see only
Risk Profile: Premium members can see only
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Entry Buying Zone : 55 to 60
Target: 75 (40% Upside)
Time Horizon: 1 Year
Risk Profile: High Risk (Stock is 3.71x as volatile as Nifty)
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Hope you liked Our 6th company in the Series of Best Stocks Below Rs. 100 . We tried to cover many important things about this company, if you think anything left to cover, you can comment us and we’ll try to cover those things also.
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