Dhanlaxmi Bank Reports Q2 Results: Revenue Up, Profit Down, Asset Quality Improves

Dhanlaxmi Bank has released its quarterly financial results, showing a mixed performance with improved revenue but a decline in net profit. The bank also reported enhancements in its asset quality metrics.

Financial Performance

The bank's financial results for the quarter show contrasting trends in revenue and profit:

Metric	Q2 (Current)	Q2 (Previous Year)	Change
Revenue	₹3.84 billion	₹3.30 billion	+16.36%
Net Profit	₹232 million	₹258 million	-10.08%

Dhanlaxmi Bank saw a significant increase in revenue, rising from ₹3.30 billion in the same quarter last year to ₹3.84 billion in the current quarter, marking a 16.36% year-over-year growth. However, despite the revenue growth, the bank's net profit decreased from ₹258 million to ₹232 million, representing a 10.08% decline compared to the same period last year.

Asset Quality Improvement

The bank's asset quality showed positive signs of improvement:

Metric	Current Quarter	Previous Quarter	Change
Gross Non-Performing Assets (GNPA)	3.10%	3.22%	-0.12%
Net Non-Performing Assets (NNPA)	1.12%	1.13%	-0.01%

Dhanlaxmi Bank reported a decrease in its Gross Non-Performing Assets (GNPA) ratio, which fell from 3.22% in the previous quarter to 3.10% in the current quarter. This represents a quarter-over-quarter improvement of 12 basis points.

Similarly, the Net Non-Performing Assets (NNPA) ratio also saw a slight improvement, decreasing from 1.13% to 1.12% quarter-over-quarter, a reduction of 1 basis point.

These improvements in asset quality metrics suggest that the bank may be making progress in managing its loan portfolio and credit risk.

Conclusion

The contrasting trends in Dhanlaxmi Bank's Q2 results present a nuanced picture of the bank's performance. While the substantial revenue growth is a positive sign, the decline in net profit may raise questions among investors and analysts. The improvements in asset quality, however, could be seen as an encouraging development for the bank's long-term stability and growth prospects.

1 Day	5 Days	1 Month	6 Months	1 Year	5 Years
-0.67%	+0.60%	+7.75%	-7.71%	-3.56%	+180.06%

Dhanlaxmi Bank has reported robust financial performance, with significant growth across key metrics. The bank's total business grew by 17.5% year-on-year to reach ₹30,147.00 crore.

Deposit and Advance Growth

Total deposits increased by 17% to ₹17,103.00 crore, while gross advances grew by 18% to ₹13,044.00 crore. The bank's Current Account and Savings Account (CASA) deposits rose by 6.56% to ₹4,937.00 crore, indicating an improvement in low-cost funding.

Profitability Turnaround

In a significant development, Dhanlaxmi Bank turned profitable. The bank reported a net profit of ₹12.18 crore, compared to a net loss of ₹8.00 crore in the same period of the previous year. This turnaround was supported by a substantial increase in net interest income, which jumped 39.3% to ₹139.00 crore from ₹99.89 crore in the year-ago period.

Asset Quality

There are some changes in asset quality metrics:

Gross Non-Performing Assets (NPAs) rose to 3.22% from 2.98% in the previous quarter.
Net NPAs increased to 1.13% from 1.00% in the previous quarter.

Market Response

The market responded positively to the bank's performance, with Dhanlaxmi Bank's shares closing 0.68% higher at ₹25.32 on the National Stock Exchange (NSE).

While the bank has shown impressive growth and a return to profitability, the change in NPAs will likely be an area of focus for management and investors. The bank's ability to maintain its growth trajectory while managing asset quality will be crucial for its long-term performance.