Accumulate Capital First; target of Rs 690: Prabhudas Lilladher
Prabhudas Lilladher has recommended accumulate rating on Capital First with a target price of Rs 690 in its research report dated November 09, 2016.
November 18, 2016 / 11:47 IST
CAFL’s PAT of Rs 576 mn was above expectation (PLe: Rs 519 mn) mainly on beat from strong NII of Rs 3.85 bn (PLe: Rs 3.74 bn) and comparatively lower provisions. AUM growth of 32% YoY remained robust but was slightly below estimate as whole book contracted. PPoP was slightly soft on high opex (C/I increased 350bps QoQ) mainly on higher amortization cost & other expenses. RoEs improvement remains on track as we expect AUM growth to be robust led by retail, leading to further improvement in margins to 7‐8% in FY17. We have reworked our estimates slightly to factor in better NIMs, higher opex and increase in credit cost for FY17E & FY18E. We maintain ACCUMULATE with revised TP of Rs 690 (from Rs 715).
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