Half of Bharat Fin's at-risk portfolio likely to go bad: Analyst

Bharat Financial Inclusion on Monday said that 4.5 percent of its gross loan portfolio is at risk of turning into bad loan in the on-going fourth quarter. In a concall, the management said that portfolio with more than 8 weeks overdue was at Rs 383 crore. At least half of this 4.5 percent is likely to turn into a non-performing asset (NPA), according to Parag Jariwala, VP – Institutional Research, Banking & Financial Services at Religare Capital. Religare has a sell call on the stock with target price of Rs 550. More than demonetisation, it is political interference in Uttar Pradesh and Maharashtra that is main concern for the company. The management said than 60 percent of the overdues are from states of UP and Maharashtra. The company further said it expects overdues to be repaid only in 3-4 months. Earlier, the company had expected overdues to come in by March-end. However, Digant Haria of Antique Stock Broking said that since the issue is in election-related areas, things could improve for the company in coming months. If the situation improves, then the loss for Bharat Financial will be approximately Rs 100-200 crore. Antique has a buy call on the stock.Some collateral damage is expected for all micro-finance companies, according to Haria. Watch video for more.