MOSL: EQUITAS HOLDINGS (Buy)-Steady shift to secured products-at PAR delinquencies in MF up marginally
​Equitas Holdings: Steady shift to secured products; at PAR delinquencies in MF up marginally
(EQUITAS IN, Mkt Cap USD0.9b, CMP INR167, TP INR201, 20% Upside, Buy)
- Equitas reported PAT growth of 126% QoQ (-75% YoY) to INR156m (15% miss). PPoP exceeded estimate by 31%, helped by lumpy PSLC fees and largely in-line NII. Other income of INR820m (1.6x beat) included INR600m of PSLC fees. However, provisions of INR441m (above est. of INR250m; includes INR240m of additional provision for MF portfolio) led to PAT miss of 9%.
- AUM/loan book grew -2%/7% YoY and 7%/5% QoQ. The share of microfinance AUM fell to 42% of total v/s 46% in 4QFY17, as microfinance disbursements declined 21%/57% QoQ/YoY. Overall disbursements declined to INR10.6b v/s INR13.9b a year ago (largely stable QoQ).
- In line with its strategy, Equitas has lowered unsecured portion of AUMs to 44% v/s 47% in 4Q, with robust growth in secured lending products like UCV (+21% YoY) and M-LAP/LAP (+29% YoY), and new product additions (business, gold, agri loans, etc.).
- Non-MF GNPA % increased to 4.9% v/s 4.5% a quarter ago, while MF portfolio NPA increased from 2.5% to 5%. The RBI's 90-day relaxation window closure led to higher NPA in non-MF portfolio. Total pool of at PAR delinquencies in MF portfolio increased to INR2.08b v/s INR1.9b a quarter ago.
- GNPA increased 46% in absolute terms, and calculated PCR rose 270bp QoQ to 51.7%. GNPA/NNPA stood at 4.91% (4.99% in microfinance portfolio and 4.85% in non-MF)/2.95%. Coverage ratio on MF portfolio is healthy at 58%.
Equitas Holdings Limited (EHL) is the holding company. The Company is engages in the businesses through its subsidiaries: Equitas Micro Finance Limited (EMFL), which is engaged in micro finance; Equitas Finance Limited (EFL), which provides used commercial vehicle (UCV) loans, micro and small and enterprise (MSE) finance, and others; Equitas Housing Finance Limited (EHFL), which is engaged in affordable housing loans and micro housing loans, and Equitas Technology Private Limited (ETPL), which offers technology platform for freight, logistics, carriers and related services. The Company's segments include Micro Finance, Other Finance and Others. The Micro Finance segment consists of micro financing. The Other Finance segment consists of housing finance and vehicle finance. The Company also provides loans to subsidiaries and corporate guarantees for the borrowings of subsidiaries from banks and institutions.
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.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.