Buy Magma Fincorp, target price Rs 95: ICICI Securities

ICICI Securities has buy call on Magma Fincorp with a target price of Rs 95. The current market price of Magma Fincorp Ltd. is Rs 77.25.

Magma Fincorp Ltd., incorporated in the year 1978, is a Small Cap company (having a market cap of Rs 2085.29 Crore) operating in NBFC sector.

Financials
For the quarter ended 31-12-2020, the company reported a Consolidated sales of Rs 589.33 Crore, down -.77 % from last quarter Sales of Rs 593.87 Crore and down -3.24 % from last year same quarter Sales of Rs 609.06 Crore. Company reported net profit after tax of Rs 12.51 Crore in latest quarter.


Investment Rationale
Business reorganisation and consolidation phase has depressed the valuation multiple sub-0.5x, but is now looking up (from medium-term perspective). Also, value discovery in housing finance and general insurance, being in an advanced stage, can be a key rerating trigger.

Promoter/FII Holdings
Promoters held 24.4 per cent stake in the company as of Dec 30, 2020, while FIIs held 40.8 per cent, DIIs 14.3 per cent and public and others 20.5 per cent.