Equitas Small Finance Bank: A Profitable lender to small businesses

Are you referring to Earning Power Value? If Yes,

To calculate the Earnings Power Value (EPV) for a stock, you typically need to estimate the sustainable earnings and choose an appropriate discount rate. In this case, I’ll make some assumptions to estimate sustainable earnings and use a hypothetical discount rate for illustrative purposes. Please note that this is a simplified calculation and should not be considered a precise valuation.

Let’s assume that the sustainable earnings for Equitas are the average net profit over the past five years, which would be from March 2019 to March 2023:

Net Profit (March 2019 to March 2023):
244 + 384 + 281 + 574 + 668 = 2151

Average Net Profit (Sustainable Earnings):
2151 / 5 = 430.2

Now, let’s assume a hypothetical discount rate of 10% for this calculation.

EPV = Sustainable Earnings / Discount Rate
EPV = 430.2 / 0.10
EPV = 4302

So, using these assumptions, the estimated Earnings Power Value (EPV) for the stock would be 4,302.

Please keep in mind that this is a simplified calculation for illustration purposes, and in practice, determining sustainable earnings and selecting an appropriate discount rate would require a more in-depth financial analysis and consideration of various factors. Additionally, different analysts may use different methods and assumptions, which can lead to different EPV estimates.