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Buy Equitas Holdings, target price Rs 160: Motilal Oswal

Motilal Oswal has buy call on with a target price of Rs 160. The current market price of Equitas Holdings is Rs 122.85. Time period given by analyst is one year when Equitas Holdings Ltd. price can reach defined target.

Equitas Holdings Ltd., incorporated in the year 2007, is a Mid Cap company (having a market cap of Rs 4198.89 Crore) operating in Holding Company sector.


Financials
For the quarter ended 31-03-2021, the company reported a Consolidated Total Income of Rs 1002.39 Crore, down -13.02 % from last quarter Total Income of Rs 1152.44 Crore and up 24.50 % from last year same quarter Total Income of Rs 805.16 Crore. Company reported net profit after tax of Rs 104.06 Crore in latest quarter.

Investment Rationale
Equitas reported a muted 1QFY22, with AUM growth impacted due to the lockdown, while higher provisioning dented earnings. Deposit growth remains robust, led by healthy traction in SA deposits. On the asset quality front, CE was impacted over 1QFY22, which resulted in a deterioration in asset quality. However, it showed a strong recovery in Jul’21, pointing towards a quicker recovery. Restructured book increased to 7.5% of loans (guidance of ~12%), which keeps us watchful on asset quality in the near term. We cut our FY22E/FY23E earnings estimate by 36%/14% and build in higher (2.5%) credit cost for FY22E.

Promoter/FII Holdings
Promoters held 0 per cent stake in the company as of June 30, 2021, while FIIs held 28.9 per cent, DIIs 32.1 per cent and public and others 39 per cent.

(Disclaimer: Views and recommendations given in this section are the analysts’ own and do not represent those of ETMarkets.com. Please consult your financial adviser before taking any position in the stock/s mentioned.

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