Shares of SBFC Finance surged over 18% to reach an all-time high of ₹104.35 per share on September 23, 2024, following a credit rating upgrade by ICRA. The credit rating agency upgraded the company's long-term, fund-based term loan of ₹2,100 crore to 'AA-' with a stable outlook, up from the previous rating of 'A+'. ICRA also upgraded and withdrew SBFC's long-term, unallocated fund-based bank lines worth ₹1,400 crore, assigning the same 'AA-' stable rating.
This rating signifies very low credit risk and strong confidence in the company's ability to meet its financial commitments on time. The stock saw a substantial increase in trading volume, with approximately 7 crore equity shares exchanging hands on the BSE and NSE, far exceeding the one-week average of 37 lakh shares.
In the June 2024 quarter, SBFC Finance reported a 68% year-on-year increase in net profit, reaching ₹79 crore, up from ₹47 crore in the same period last year. Revenue from operations also increased by 30% YoY to ₹298 crore, compared to ₹229 crore in Q1FY25.
SBFC Finance is a non-deposit-taking NBFC (Non-Banking Financial Company) that primarily caters to entrepreneurs, small business owners, self-employed individuals, and salaried or working-class customers. The company offers secured MSME loans and loans backed by gold, positioning itself as a key lender in this segment.
Currently, four brokerages cover SBFC Finance stock, with three recommending a 'buy' and one suggesting a 'hold'. Despite the recent surge, SBFC Finance's shares have risen by 19% over the past year, underperforming the Nifty 50 index, which grew by 31% during the same period.
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