Buy Equitas Holdings; target of Rs 220: Edelweiss

December 06
23:41 2017

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.

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