YES Securities' research report on Equitas Small Finance Bank
Equitas SFB delivered nearly an in-line PAT wherein lower-than-estimated credit cost (asset quality internals much better than preceding 2Qs) was offset by higher employee cost (~Rs0.3bn employee-related provionsing reversals in preceding 2Qs and 6% qoq increase in headcount). Yoy growth in NII and PPOP was ahead of the 20% loan growth and there was marginal 5 bps qoq decline in NIM. Stronger growth in affordable housing (17% qoq) and new vehicle financing (9% qoq), and lower growth in MFI book (3% qoq) were factors behind stable portfolio yield. Increase in Bulk TD contribution and decline in CASA share were reasons behind slight uptick in CoD. Brisk traction in core fees continued.
Outlook
We however retain BUY on favourable riskreward with valuation at 1.2x FY24 P/ABV.
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