Motilal Oswal 's research report on Shriram City Union Finance
SCUF reported 4QFY20 PAT at INR1.5b (42% miss). The miss was largely on account of NII miss and higher-than-expected credit cost. NII declined 5% YoY to INR8.5b (4% miss) due to interest reversal of INR310m. Total credit costs were INR3.1b (52% higher than estimate).
Outlook
We increase our FY21/FY22 credit costs to 4.5%/4.1%. Hence, our EPS estimates are downgraded by ~25%. Given the undemanding valuations, we maintain Buy, with TP of INR850 (0.7x FY22E BVPS).
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