Buy Equitas Holdings; target of Rs 220: Edelweiss
Edelweiss’ research report on Equitas Holdings
We met the top management of Equitas Holdings (Equitas), which reinforced our confidence that it is on course to build a sustainable and scalable small finance bank franchise. The focus is on customer acquisition, reaping the benefits of a diversified product offering as well as ramping-up deposit base. However, during the transition phase, RoEs shall be depressed (<15%) given its strategy to significantly bring down proportion of micro finance (MFI) business to about 30% by FY18 and further to 15% by FY20. Moreover, credit cost pertaining to stressed MFI book of INR750- 800mn might be up-fronted over the next 1-3 quarters.
We maintain a ‘BUY’rating with a TP of INR220. Equitas is one of our top sector picks.
For all recommendations report, click here
Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.