Loan growth healthy; strong improvement in margins aids profitability SCUF posted a 1QFY23 PAT of INR3.2b, up 55% YoY and 6% QoQ (14% beat). The beat was driven by healthy NII growth of 22% YoY and benign credit costs of 2.7% (steady-state credit costs in the range of 2.5%-3.0%). The quarter was characterized by a healthy ~74% YoY and 5% QoQ growth in disbursements to ~INR79b. AUM grew 17% YoY/4% QoQ to ~INR346b. Product mix further improved in favor of personal loans (PL) and has aided yie...
SHRIRAM CITY UNION FIN. (IN), a company active in the Consumer Finance industry, now shows a lower overall rating. The independent financial analyst theScreener confirms the fundamental rating of 2 out of 4 stars. However, the market behaviour deterioration triggered a risk requalification, which can be thus described as moderately risky. theScreener believes that increased risk justifies the general evaluation downgrade to Neutral. As of the analysis date February 22, 2022, the closing price wa...
Full Article at IIR has reaffirmed its Recommended rating for PIA after undertaking a review post the appointment of a new Portfolio Manager, Harding Loevner. The full report can be found on the IIR website. On 26 July 2021, Pengana International Equities Limited (PIA) announced a fully franked dividend of 1.35 cents per share for the June quarter. This represents an 8% increase on the March quarter dividend and takes the total dividends declared for FY21 of 5.1 cents per share, fully franked....
SHRIRAM CITY UNION FINANCE: No major deterioration in asset quality; restructuring minimal (SCUF IN, Mkt Cap USD1.6b, CMP INR1856, TP INR2150, 16% Upside, Buy) Elevated credit costs drive PAT miss Shriram City Union Finance (SCUF) posted PAT of INR2.1b (up 8% YoY; 14% miss) in 1QFY22. PPOP was largely in-line at INR5.7b (flat YoY). While NII stood at INR8.8b (in-line), credit costs stood at INR2.9b (~16% above est.), leading to the PAT miss. 1QFY22 was characterized by a sequentially mu...
Shriram City Union Finance: Growth remains muted; Asset quality improving (SCUF IN, Mkt Cap USD1.3b, CMP INR1357, TP INR1600, 18% Upside, Buy) PAT beat driven by lower credit costs and tax rate SCUF reported 3QFY20 PAT at INR2.97b (9% beat). While NII and PPoP were in line with estimates (~2% YoY growth), lower credit cost (4% beat) and lower taxes (7% below est.) led to the PAT beat. AUM remains range-bound at ~INR300b, while spreads improved 30bp sequentially to 9.5%. We raise our EPS...
SHRIRAM CITY UNION FINANCE: Disbursements down; Asset quality healthy (SCUF IN, Mkt Cap USD1.2b, CMP INR1325, TP INR1600, 21% Upside, Buy) Core PBT of INR3.8b was largely flat QoQ/YoY and in line with our estimates. However, given the lower-than-expected tax rates, PAT beat our estimate by 6% (+19% YoY to INR3.0b). 2QFY20 was one of the toughest quarters since the liquidity crisis. The quarter was characterized by slowdown in MSME disbursements (down 44% YoY), leading to 19% YoY decline ...
SHRIRAM CITY UNION FINANCE: Disbursements down; Asset quality healthy (SCUF IN, Mkt Cap USD1.2b, CMP INR1325, TP INR1600, 21% Upside, Buy) Core PBT of INR3.8b was largely flat QoQ/YoY and in line with our estimates. However, given the lower-than-expected tax rates, PAT beat our estimate by 6% (+19% YoY to INR3.0b). 2QFY20 was one of the toughest quarters since the liquidity crisis. The quarter was characterized by slowdown in MSME disbursements (down 44% YoY), leading to 19% YoY decline ...
SHRIRAM CITY UNION FINANCE: Operating performance in line; scaling back in MSME finance (SCUF IN, Mkt Cap USD1.3b, CMP INR1403, TP INR1900, 35% Upside, Buy) PAT grew 10% YoY to INR2.5b (3% miss) in 1QFY20. The quarter was characterized by a slowdown in MSME disbursements, leading to sluggish overall growth, contraction in margins and stable asset quality. MSME finance disbursements were down 20-25% QoQ/YoY to INR22.8b on account of (a) tight liquidity, and (b) scaling back in large-tick...
SHRIRAM CITY UNION FINANCE: Disbursements rebound, asset quality improves (SCUF IN, Mkt Cap USD1.6b, CMP INR1698, TP INR2100, 24% Upside, Buy) PAT of INR2.5b beat our estimates by 18%, while NII was largely in line with estimates. Lower opex and credit costs led to the PAT beat. Disbursements (INR66b) rebounded from a sluggish 3Q, almost reaching a record peak, despite tepid gold loan disbursements. The two key lending segments - MSME and 2Ws - fired on all cylinders with disbursements ...
Shriram City Union Finance: Liquidity crunch impact meaningful; Asset quality improves (SCUF IN, Mkt Cap USD1.6b, CMP INR1718, TP INR2000, 16% Upside, Buy) Shriram City Union Finance’s (SCUF) PAT increased 2% YoY to INR2.6b in 3QFY19 – a 10% beat – largely driven by provision write-back of INR161m. On a PPoP basis, there was a 12% miss on our estimates, mainly due to the slowdown on account of tight liquidity. Disbursements declined 29% QoQ/YoY to INR45b. Excluding gold finance, disburs...
SHRIRAM CITY UNION FINANCE: Margins surprise positively; Growth to be calibrated going forward (SCUF IN, Mkt Cap USD1.4b, CMP INR1580, TP INR2000, 27% Upside, Buy) Shriram City Union Finance (SCUF) reported 2QFY19 PAT at INR2.5b under Ind-AS (+6% YoY). Under IGAAP, PAT grew 10% YoY to INR2.4b (11% above estimate). The beat was largely led by better-than-expected spreads. Disbursements grew 5% YoY to INR65b. However, excluding gold finance, disbursements were up 16% YoY. SCUF funded ~300...
Shriram City Union Finance: Visible pickup in disbursements; ECL is 7.3% of AUM (SCUF IN, Mkt Cap USD1.8b, CMP INR1911, TP INR2500, 31% Upside, Buy) SCUF reported PAT of INR2.3b under Ind-AS (+15% YoY). Under IGAAP, PAT grew 10% YoY to INR2.13b (7% above estimate). The beat was largely led by less-than-expected yield compression. Disbursements grew 11% YoY to INR64b. However, excluding gold finance, disbursements were up 23% YoY. MSME finance has picked up – from an average quarterly le...
SHRIRAM CITY UNION FINANCE (Ground Reality): Mixed bag; Yields under pressure; initial results of new MSME sourcing model positive We met the management of Shriram City Union Finance (SCUF), its branch heads, 2W dealerships where it conducts business, and also a few of its MSME customers. Demand in the MSME and 2W segments has been picking up. In addition, SCUF is trying to prevent customer migration to banks after a loan cycle is complete by offering 200bp lower interest rates in the se...
Shriram City Union Finance: Visible pickup in MSME and 2W segments (SCUF IN, Mkt Cap USD2.4b, CMP INR2402, TP INR2800, 17% Upside, Buy) SCUF reported PAT of INR470m for 4QFY18, much below our estimate. This was largely driven by higher provisioning expenses. PPoP grew 14% YoY (3% miss) to INR4.9b. Disbursements grew 6% YoY to INR66b. MSME disbursements grew 30% YoY to INR31b, which reflects a breakout from the range-bound levels of INR23b-25b in the last 7-8 quarters. Likewise, disburse...
Shriram City Union Finance: Investing in 2W financing business; Other segments stable (SCUF IN, Mkt Cap USD2.1b, CMP INR2052, TP INR2500, 22% Upside, Buy) Shriram City Union Finance’s (SCUF) 3QFY18 PAT grew 34% YoY (adj. for one-time gain on sale) to INR2.11b, 4% ahead of our estimate of INR2.0b. However, PAT belies the modest core operating performance. PPoP (excl. one-time gain) was up only 14% YoY, missing estimate by 6%. While disbursements in most segments were in line with past tr...
​Shriram City Union Finance:Headwinds wither, albeit slowly(SCUF IN, Mkt Cap USD2.1b, CMP INR2248, TP INR2650, 18% Upside, Buy)2QFY18 PAT declined 3% YoY to INR2.0b. Operating profit rose 20% YoY (3% beat), driven by strong loan growth and controlled opex. However, a sharp increase in credit costs (+71% YoY) weighed on the bottom line.Recovery has been slow post demonetization and rollout of GST. In the last four quarters since demonetization, non-gold disbursements grew at an average of only ...
​Shriram City Union Finance: Sluggish quarter; quantum of write-offs inching up(SCUF IN, Mkt Cap USD2.1b, CMP INR2326, TP INR2800, 20% Upside, Buy)Shriram City Union Finance's (SCUF) 1QFY18 PAT increased 7% YoY to INR1.9b. Operating profit was up 20% YoY (in line), driven by strong loan growth and controlled opex. However, sharp increase in provisions (higher write-offs) drove moderate profit growth. After strong performance in 1QFY17, disbursement growth in 1QFY18 moderated to 7% YoY. Disburs...
​Shriram City Union Finance: Strong operating performance; estimates largely unchanged(SHCF IN, Mkt Cap USD2.1b, CMP INR2138, TP INR2689, 26% Upside, Buy)Shriram City Union Finance’s (SCUF) 4QFY17 PAT declined 78% YoY to INR120m. However, this belies the strong operating performance in the quarter. Operating profit was up 26% YoY (est. of +11%), driven by strong loan growth, lower cost of funds and controlled opex.After a muted 3Q, disbursements picked up 20% YoY to INR62.5b. As a result, AU...
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