HDFC Securities' research report on Shriram City Union Finance
SCUFs 4Q results were bogged down by the shift to 90DPD. Higher provisions (2x sequentially) led to a significant miss on net earnings (~Rs 470mn vs. an estimate of ~Rs 1.6bn). Opex also jumped (~15% YoY) primarily driven by higher staff costs (32% YoY) as SCUF built up higher bench strength.
Outlook
We believe growth revival is a given. Dip in provisions and a tight leash on costs will boost return ratios 49bps over FY18-20E. Maintain BUY with TP of Rs 2,527 (2.5x Mar-20E ABV of Rs 1,011).For all recommendations report, click here
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