Shares of Equitas Small Finance Bank have been having a dream run on the bourses as the stock is up over 34% in the past month.
What Happened: The Chennai-headquartered bank posted strong Q3FY23 numbers earlier this month, beating consensus estimates. The company reported the highest quarterly net profits of ₹170 crore in Q3FY23 compared to the ₹108 crore it booked in the corresponding quarter. The company’s Net Interest Income — the difference between the interest income company gets from its lending activities vs interest expended on deposits — jumped close to 20% YoY to ₹647.5 crore. The lender also saw its disbursements surge over 68% YoY to ₹4,797 crore.
The Q3 numbers impressed the analysts who remain strongly positive on the stock. Axis Direct and ICICI Securities maintained the ‘buy’ rating for the stock with a target price of ₹70 after the results came out.
So with this dream run going, how much money would you have made if you bought Equitas Small Finance Bank shares instead of buying its FD?
The bank currently offers a 5% interest on FDs with a 180 days tenure. So, let’s say you invested ₹50,000 in the FD for six months, on Tuesday on maturity you would have around ₹51,250.
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Now, if you invested that ₹50,000 in the stock six months back i.e. on Aug. 29, 2022, when it closed at ₹45.60, you would have gotten around 1096 shares of the company. Since then, the stock has jumped around 60%. So today, your ₹50,000 investment would be worth around ₹80,000 registering around 56% higher returns than the FD.
If you invested the same amount on Feb. 8, 2023, when the company released its Q3 results, and the stock closed at ₹55.80, it would have fetched you around 896 shares of the company. Today, around 20 days later, your investment would have been worth around ₹65,408 — an over 30% return on investment.
Price Action: Equitas Small Finance Bank Shares jumped 2.52% to trade ₹71.15 on Tuesday afternoon.
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