Motilal Oswal is bullish on Equitas Holdings has recommended buy rating on the stock with a target price of Rs 185 in its research report dated April 30, 2018.
Motilal Oswal's research report on Equitas Holdings
Equitas (EQUITAS) reported PPoP growth of 62%/42% QoQ/YoY (INR675m, off a low base), driven by strong cost control (cost-to-income ratio declined to a multi-quarter low of 77%). Total income increased 6.5%/20.3% QoQ/YoY (NII growth of 12% YoY, other income growth of 111% YoY, driven by higher share of liability fees). Provisions were controlled at INR139m, leading to PAT of INR348m.
Outlook
With MFI accounting for 28% of AUMs, EQUITAS has beaten its target of reducing the share of MFI in overall loans to ~30% by FY18. This has been partially offset by high growth in secured products. We expect near-term recalibration of the growth strategy to yield positive results over medium-to-long term. Reiterate Buy with a target price of INR185/share based on 2.3x Mar 20E ABV.
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