Buy Equitas Small Finance Bank, target price Rs 80: Emkay Global

Emkay Global has buy call on Equitas Small Finance Bank with a target price of Rs 80. The current market price of Equitas Small Finance Bank is Rs 56.45. Time period given by analyst is one year when Equitas Small Finance Bank Ltd. 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 6485.57 Crore).

Equitas Small Finance Bank Ltd. key Products/Revenue Segments include Interest & Discount on Advances & Bills, Income From Investment and Interest On Balances with RBI and Other Inter-Bank Funds for the year ending 31-Mar-2021.



Financials
For the quarter ended 31-12-2021, the company reported a Standalone Total Income of Rs 1035.01 Crore, up 4.40 % from last quarter Total Income of Rs 991.40 Crore and up 3.14 % from last year same quarter Total Income of Rs 1003.54 Crore. The bank reported net profit after tax of Rs 108.10 Crore in latest quarter.

Investment Rationale
ESFB has done very well on the liability front while diversifying its asset base away from MFI. However, it needs to manage asset quality and build better provisioning buffers. Retain Buy with a TP of Rs80 (2x Dec’23E ABV) and also on holdco with a TP of Rs175.

Promoter/FII Holdings
Promoters held 81.36 per cent stake in the company as of 31-Dec-2021, while FIIs owned 2.1 per cent, DIIs 11.41 per cent.