Shares of Dhanlaxmi Bank soared by 12% on Tuesday, buoyed by a robust September quarter report. The bank's deposits grew by 8.2% to reach INR 13,789 crore while gross advances climbed by 13.2% to INR 10,312 crore. This financial boost comes amidst a challenging time for the bank as it deals with internal strife. Sridhar Kalyanasundaram, an independent director of the bank, stepped down from his position due to allegations of unethical conduct and ongoing board conflicts.
The recent events underscore a period of growth and turbulence for the bank. The bank's financial performance has shown resilience, despite the controversy surrounding Kalyanasundaram's resignation. The strong quarterly update has been reflected in the bank's stock performance, which experienced a significant uplift. According to InvestingPro's real-time metrics, Dhanlaxmi Bank has seen a high return over the last year and is currently trading near its 52-week high.
The increase in deposits and advances indicates a positive response from customers and investors alike. InvestingPro Tips suggest that Dhanlaxmi Bank, though quickly burning through cash, has managed to maintain low earnings quality, with free cash flow trailing net income. This, coupled with the bank's valuation implying a poor free cash flow yield, might be a point of concern for potential investors. Yet, the bank has shown a strong return over the last three months, which is a positive sign for its future performance.
It remains to be seen how the bank will navigate through its internal issues and maintain this momentum in the coming quarters. For more insights like these, consider subscribing to InvestingPro, which offers access to over 10 additional tips on Dhanlaxmi Bank and other companies.
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