MOSL: Morning India (7/April/17)-1. Equitas Holdings (Reassessing risk in the portfolio); 2. EcoScope
​MOrning India (7/April/17): 1. Equitas Holdings (Reassessing risk in the portfolio); 2. EcoScope
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Today’s top research idea
Equitas Holdings: Reassessing risk in the portfolio; Doing the right things; near-term pain for long-term gain
-Identifying potential risks early on, EQUITAS is prudently moderating exposure in micro finance (MFI) segment by reducing share of MFI to ~30% of loans (~50% in 9MFY17). It has narrowed timeline for meeting this target to 2018 v/s 2020 earlier.
-Strong growth in secured products like micro LAP, vehicle finance, and newly launched products like housing, business, gold and agri-loans will drive ~20% AUM growth in FY18 (30% earlier), despite 15-20% decline in the MFI portfolio.
-Recalibration of liability side, improving CoF and increasing cross-sell and fee income opportunity are positive triggers for EQUITAS over the long term.
-We like EQUITAS focus on diversification, strong growth visibility, prudent risk management practices and pristine management team. We reiterate Buy with a TP of INR220 (2.7x FY19E BV).
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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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