Buy Satin Creditcare; target of Rs 590: Centrum Research

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26 Aug, 2025 12:21

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Centrum Research's research report on Satin Creditcare

We retain Buy on Satin Creditcare (SATIN) and revise our TP upwards to Rs590 (vs. Rs550 earlier). FY18 could well be characterised as the year of turnaround for SATIN as it placed greater emphasis at a) growth with better controls b) lower NPAs YoY and c) increased use of technology.  We expect growth momentum to accelerate and will be driven by favourable sector dynamics, increasing share of repeat customers and penetration into newer geographies. NPAs remain a tad sticky and will thus see provisions remain elevated.

Outlook
We remain convinced with SATIN business model and see RoE’s inch to 13-14% levels by end-FY20E. RoA could well be in excess of 2.0%. Valuations at 1.6x FY20E ABV remain attractive. Retain BUY with TP at Rs590 (valued at 2.3x FY20E ABV). Key risks – lower than expected growth; elevated NPA’s and thus the provisioning thereon.
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