MOSL: BHARAT FINANCIAL INCLUSION (Under Review)-Post-demonetization recovery taking root
​Bharat Financial Inclusion: Post-demonetization recovery taking root
(BHAFIN IN, Mkt Cap USD2.0b, CMP INR972, Under Review)
- BHAFIN reported 2QFY18 PAT of INR1.2b (3% miss), driven by a healthy uptick in net income (+4% beat), offset by higher-than-expected credit costs. We believe that a post-demonetization recovery is taking root, and is likely to continue in the coming quarters.
- AUM grew 17% YoY to INR106b, reflecting an upward trajectory for the second consecutive quarter. This, coupled with the fact that active borrowers (+3% QoQ) and the number of loans disbursed (+12% QoQ) increased sequentially after 2-3 quarters of decline, gives us confidence in a better operating environment, going forward. We forecast AUM to touch INR134b in FY18, reflecting annual growth of 47%.
- We note that cumulative collection efficiency from Jan-17 to Oct-17 for loans disbursed (INR 126b) during the same period stands at 99.8%. Portfolio originated during the same period is 82% of the gross loan portfolio (GLP).
Bharat Financial Inclusion Limited, formerly SKS Microfinance Limited, is a non-banking financial company-micro finance institution (NBFC-MFI). The Company is engaged in providing micro finance services to women in the rural areas of India enrolled as members and organized as Joint Liability Groups. In addition to its business of providing micro-credit, the Company uses its distribution channel to provide other financial products and services to the members. Programs in this regard primarily relate to providing of loans to the members for the purchase of mobile handsets, solar lamps, bicycle and sewing machines, among others. The Company provides door step delivery of its services through center meetings in villages. The Company offers loans mainly for income generating activities and not for personal consumption. The Company has presence across approximately 20 states, covering over 100,000 villages and catering to approximately 69.7 lakh women members.
Motilal Oswal Financial Services Ltd. is a reputed name in Financial Services and Online Trading with group companies providing services such as Private Wealth Management, Retail Broking and Distribution, Institutional Broking, Asset Management, Investment Banking, Private Equity, Commodity Broking, Currency Broking, Principal Strategies & Home Finance.
Motilal Oswal Securities is a group company of Motilal Oswal Financial Service Limited which started as a stock trading company and has blossomed into well diversified firm offering a range of financial products and services. Motilal Oswal has built a reputation as the source for best stock trading company and this has taken a wealth of experience, knowledge and expertise, constantly working in tandem, over the years.
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