Hold Bharat Financial Inclusion; target of Rs 1193: Centrum
Centrum Research’s report on Bharat Financial Inclusion
Bharat Financial Inclusion Ltd (BFIL), for Q3FY18, reported good set of numbers with gross NPAs declining 60bps QoQ to 4.6%, along with a gross loan growth of 34.4% to ?11,466 crore. The net interest income grew 41.4%. However, with the cost-income ratio (CI%) increasing 360bps YoY to 43.2%, the pre-provisioning profit grew at a slower pace of 16.8%. Net profit grew 13.9%.
We maintain our hold recommendation on the stock valuing it at 3.5x its FY20E adjusted book value (ABV) and adding PV of DTA benefits, arriving at a target of ?1,193.
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