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Last Updated : May 18, 2020 05:04 PM IST | Source: Moneycontrol.com

Buy Equitas Holdings; target of Rs 65: Motilal Oswal

Motilal Oswal is bullish on Equitas Holdings has recommended buy rating on the stock with a target price of Rs 65 in its research report dated May 17, 2020.

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Motilal Oswal 's research report on Equitas Holdings


In 4QFY20, EQUITAS provided higher than required provisions toward COVID-19, which affected earnings despite strong NII/PPoP growth. Inspite of the lockdown in the last few days of Mar'20, AUM growth was steady at 31% YoY. We remain cautious of EQUITAS' asset quality trends in the near term as 98.3% of borrowers have availed moratorium (93% of portfolio value). We cut our FY21/FY22E PAT estimate to primarily factor in higher delinquency trend and moderation in loan growth. Maintain Buy.


Outlook


We estimate credit cost to rise sharply to 2.7% for FY21E. We, thus, cut our PAT estimates by 45%/37% for FY21/FY22E. We revise our TP to INR65 (0.8x FY22 ABV). Maintain Buy.


For all recommendations report, click here


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First Published on May 18, 2020 05:04 pm
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