EUR 120.00 For Business Accounts Only

MOSL: MOrning India (28/June/22): 1. Vehicle Finance (Margin compression imminent, but are there other levers?); 2. Container Corporation (Well placed to capitalize from the DFC opportunity); 3. EcoScope (Mons

Today’s top research idea

Vehicle Finance: Margin compression imminent, but are there other levers?

• Expect vehicle financiers to use the levers of operating and credit costs to deliver a healthy RoA, despite the expected compression in NIM. We model an AUM CAGR of 21%/12%/11% and a PAT CAGR of 14%/26%/ 17% for CIFC/MMFS/SHTF over FY22-24.
• This will translate in a RoA of 2.6%/1.9%/2.3% and a RoE of 19%/9%/12 for CIFC/MMFS/SHTF in FY24E. We cut our FY23/FY24 estimate by 13%/14% for MMFSL and by 4%/9% for SHTF to factor in a NIM compression and minor changes in loan growth/credit costs.
• We maintain our preference for CIFC, followed by SHTF. CIFC benefits from a well-diversified loan book, with newer business lines shaping up well. It will perhaps have more levers than its other peers to deliver a healthier RoA/RoE.

Piping hot news

M&M launches the all new Scorpio N at Rs 11.99 lakh to Rs 19.49 lakh for first 25,000 customers

Scorpio, a brand that established strong credentials for Mahindra & Mahindra as a leading Indian automotive maker, started a new chapter on Monday with a bigger and a better model in its new generation, that the company hopes will help in attaining SUV leadership in terms of revenues.