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Buy Equitas Small Finance Bank, target price Rs 92: ICICI Securities

ICICI Securities has buy call on Equitas Small Finance Bank with a target price of Rs 92. The current market price of Equitas Small Finance Bank Ltd. is Rs 64.45. Time period given by analyst is one year when Equitas Small Finance Bank price can reach defined target.

Equitas Small Finance Bank Ltd., incorporated in the year 1993, is a banking company (having a market cap of Rs 7257.20 Crore).

Financials
For the quarter ended 31-03-2021, the company reported a Standalone Total Income of Rs 996.73 Crore, down -.68 % from last quarter Total Income of Rs 1003.54 Crore and up 24.67 % from last year same quarter Total Income of Rs 799.47 Crore. The bank reported net profit after tax of Rs 112.87 Crore in latest quarter.

Investment Rationale
Delivering its highest RoA (since commencement of SFB operations) at 1.7% and RoE at 12.5% in FY21 despite covid-related challenges speaks of its business resiliency. While near-term asset quality concerns persist amid resurgence of covid cases and its high exposure to self-employed segment, lower restructuring pool at ~2.4%, provision buffer at 90bps, and calibrated lending (MFI book fell 11% YoY in FY21) reinforces the view that Equitas would navigate the current cycle more effectively than peers.

Promoter/FII Holdings
Promoters held 82 per cent stake in the company as of March31, 2021, while FIIs held 5.9 per cent, DIIs 7.9 per cent and public and others 4.2 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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