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Buy Reliance Capital; target of Rs 767: Edelweiss

June 19
19:42 2017

Edelweiss’ research report on Reliance Capital

Armed with an experienced team and heightened focus (now a separate entity), strategically the aim is to move away from being a predominant SME lender to emerge as a diversified lender. The 2-pronged strategy is to carve a niche in personal finance by creating strategic assets (mobile first acquisition process, leveraging group database, etc), while increasing market share in the strong SME domain.

Outlook

Though insurance profitability remains under pressure, we expect improvement post consolidation. We believe potential improvement in earnings will narrow down the discount between current price and inherent fair value of core businesses. We maintain ‘BUY/SP’ with SoTP of INR 767.

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