SCUF’s, AUM grew by 9.6% YoY to INR 288bn in 3QFY19 (vs. CSEC estimate of 11% YoY) predominantly led by growth in SME (18.2%YoY), 2Ws segment (9.1%YoY), and Other Non-gold loans (4.4%YoY). Consequently the loan mix was noted at SME segment (59.7%), Two Wheeler (18.3%), Loan against gold (9.6%) and Others(12.4%). Management retains its growth guidance of 18-20% CAGR over FY19-20E, to be predominantly driven by SME and 2W segments. Overall disbursements de-grew by 28% YoY in 3QFY19 to INR 45.8bn, owing to the liquidity crunch witnessed in the NBFC space. During the quarter, disbursements were largely seen in SME and in 2W segment, constituting 39% and 23% respectively of the overall disbursements.
OutlookThe stock is currently trading at 1.3X P/ABV of FY21E. We give the stock a BUY rating with a target price of INR 1,950, assigning a P/ABV of 1.5X on FY21E.
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