Moneycontrol
Jan 10, 2018 01:30 PM IST | Source: Moneycontrol.com

Buy Magma Fincorp; highly attractive valuations make good opportunity at this level: IIFL

The larger part of business restructuring is complete, while the disbursements growth is gradually improving, which will lead to credit rating upgrade, it added.

 
 
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Shares of Magma Fincorp gained 3.5 percent intraday Wednesday as IIFL initiated coverage on the stock with buy rating for a target at Rs 220 per share.

The firm believe that the company’s business performance is at an inflexion point.

The larger part of business restructuring is complete, while the disbursements growth is gradually improving, which will lead to credit rating upgrade, it added.

The financial performance will improve with AUM growth and higher loan growth, margins would aid revenue growth.

The broking house expect disbursements, AUM and net profit to grow at a compounded rate of 26 percent, 17 percent and 28 percent respectively over the financial years through March 2021.

Also, return on assets and return on equity are expected to expand to 2.4 percent and 15 percent respectively.

The valuation is highly attractive and presents a good opportunity for entry at this point, it said.

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At 13:23 hrs Magma Fincorp was quoting at Rs 170.55, up Rs 3, or 1.79 percent on the BSE.

Posted by Rakesh Patil
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