Minor seasonal deterioration in asset quality Indostar Capital Finance (Indostar) reported healthy business momentum in 1QFY25. Key highlights: 1) Disbursements grew ~46% YoY to ~INR16.3b and Retail AUM grew ~34% YoY to ~INR92b; 2) It added 579 employees in 1Q, taking the total count to ~4,578; 3) The CV segment contributed ~87% to the retail disbursement mix; and 4) Minor seasonal deterioration in asset quality with GS3 increasing ~10bp QoQ to ~4.2%.
Outlookwe expect credit costs to remain benign in the near future. The risk-reward is favorable at 0.9x FY26E P/BV. We have a BUY rating on the stock with a TP of INR290 (based on 1.1x FY26E BVPS).
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