MOSL: EQUITAS HOLDINGS (Buy)-Operating performance healthy-asset quality improves
Equitas Holdings: Operating performance healthy; asset quality improves
(EQUITAS IN, Mkt Cap USD0.6b, CMP INR125, TP INR160, 27% Upside, Buy)
- Lower provisions drive earnings: EQUITAS reported PAT of INR687m (+97.3% YoY, 2% below our estimate), largely driven by lower provisions of INR249m. PPoP of INR1.3b (+87.3% YoY) was driven by healthy NII and other income growth. Opex of INR2.8b (+22.6% YoY) was slightly elevated, driving the CI ratio to 68.5% (+43bp QoQ). For FY19, NII/PPoP/PAT recovered to INR11.8b/INR4.3b/INR2.2b, following a muted performance in FY18.
- Balance sheet de-risking continues: Total AUM grew ~44% YoY to INR118.4b, with the share of MFI at 25.9% versus 27.8% in FY18. On an absolute basis, non-MFI AUM increased by 47% to INR87.7b, primarily led by 60%/30% YoY growth in the property finance/vehicle finance portfolios. Property finance now constitutes 39.7% of the overall portfolio, as against 35.6% in FY18. Margins shrank 13bp QoQ due to the changing asset mix in favor of secured loans.
- Deposit growth healthy: Deposit base increased 70% YoY to INR80.2b, led by 86% YoY growth in TD. CASA deposits rose 39%/13% YoY/QoQ to INR22.7b, driven by 44% YoY growth in SA deposits. CASA + TD form ~63% of overall funding versus ~45% a year ago.
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.