Motilal Oswal is bullish on Equitas Holdings has recommended buy rating on the stock with a target price of Rs 160 in its research report dated November 05, 2018.
Motilal Oswal's research report on Equitas Holdings
Equitas reported PPoP growth of 142%/42% YoY/QoQ to INR1.1b (higher than our estimates) driven by controlled opex as cost to assets declined to a multi-quarter low of 6.45% (35bp QoQ decline). Total income grew 31%/8% YoY/QoQ to INR3.4b (largely in line with our estimates) led by NII growth of 22% YoY to INR2.8b and other income of INR0.7b. Provisions at INR0.3b were 9% above our estimate (credit cost for 2QFY19 came in at 1.36%) as the calculated PCR rose to 41% from ~39% in 1QFY19. We expect the bank to report INR1.1b PAT for 2HFY19 (PAT estimate for FY19E: INR1.9b).
Outlook
We reiterate BUY with a target price of INR160/share based on 2.1x Mar 20 ABV of INR75/share.
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