Buying Equitas Small Finance Bank's Shares Instead Of Its FD 6 Months Back Would Have Fetched You This Much Now

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.

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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.

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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