Indostar Capital Finance Ltd. News and Updates

Name: Latest research reports of Indostar Capital Finance Ltd. authored by HDFC Securities and published by - Trendlyne research reports.
Item: Indostar Capital Finance Ltd.
Rating: 5
Author: HDFC Securities

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Indostar Capital Finance Ltd.

11 Nov 2019

308.20

-5.60%

Indostar Capital Finance (2QFY20): Option value, unlike some Maintain BUY

Buy: Indostar Capital Finance Ltd.

Target

HDFC Securities

Talent (and integrity) are intact, unlike some other stressed NBFCs. But INDOSTAR faces challenges on asset quality. This can affect liquidity, too, as the Indian NBFC experience over the trailing year shows. We've cut growth assumptions and hiked LLPs, resulting in a ~30% earnings cut and 340bps jump in overall GNPAs by FY22E. Even under our stress case scenario (~14% corporate slippage over FY20-22E and 11% loan CAGR), the stock trades for a mere 0.7xFY22E ABV. Indostar represents option value today. Equity value is volatile, but unlikely to evaporate. Upsides, on the other hand, look tantalising. BUY with a TP of Rs 330, 1x Sep-21E ABV. INDOSTARs 2QFY20 operating performance was ahead of estimates, due to sharp NIM improvement. Higher provisions dented earnings. GNPAs dipped QoQ but concerns persist on asset quality. Maintain BUY.

Indostar Capital Fin.. has an average target of 360.00 from 1 broker.

Indostar Capital Finance Ltd.

10 Aug 2019

308.20

-5.60%

Indostar Capital Finance (1QFY20): (Star) talent faces reality check. Maintain BUY

Buy: Indostar Capital Finance Ltd.

Target

HDFC Securities

Our constructive stance on INDOSTAR is driven by increasing retailisation and opportunistic caution on the corporate segment. Indostar's talent is unquestionable, but it faces a severe reality check. We've adjusted growth and LLP assumptions to reflect macro stress, resulting in a ~13% earnings cut. Lumpy stress and losses in the RE book are not ruled out. These, and systemic liquidity issues, pose further risk. In spite of striking asset quality deterioration and an earnings miss, we maintain BUY on INDOSTAR with a TP of Rs 506 (1.5x Mar-21E ABV). Worse than expected asset quality outcomes appear to be priced in.

Indostar Capital Finance Ltd. is trading at high volume of 797.7K with price loss of -5.60.

Indostar Capital Finance Ltd.

22 May 2019

308.20

-5.60%

Indostar Capital Finance (4QFY19): Twinkle, twinkle Maintain BUY

Buy: Indostar Capital Finance Ltd.

Target

HDFC Securities

Opportunistic and tactile lending by an astute management along with increasing retailisation underpins our constructive stance on Indostar. While critics are wary of its real estate and structured finance exposure, calculated repayment rates and immaculate asset quality should dispel concerns. Current attractive valuations (<1x Mar-21E ABV) imply significant deterioration in corporate asset quality, which we believe is unlikely. We have reduced ABV to factor portfolio acquisition goodwill. We maintain BUY on INDOSTAR (TP of Rs 520, 1.5x Mar-21E ABV of Rs 347) after an in-line 4Q and, incredibly, an improvement in corporate asset quality.

Indostar Capital Finance Ltd. is trading below its 30 day SMA of 338.5

Indostar Capital Finance Ltd.

21 May 2019

308.20

-5.60%

Steady quarter; Acquisition of IIFL 's CV financing business complete

Buy: Indostar Capital Finance Ltd.

Motilal Oswal

Steady quarter; Acquisition of IIFL's CV financing business complete 4QFY19 PAT increased 83% YoY to INR741m, driven by healthy NII growth, higher upfronting of assignment income and controlled opex. The company completed the INR35.2b (INR22.4b on-book) acquisition of IIFL's CV financing business on 31st Mar'19, resulting in goodwill of ~INR3b. Excluding the acquisition, total AUM grew 8% QoQ to INR83.7b, largely driven by the VF portfolio. Disbursements in corporate finance rebounded from INR3-4b in the past...

Indostar Capital Finance Ltd. is trading at high volume of 797.7K with price loss of -5.60.

Indostar Capital Finance Ltd.

16 Apr 2019

308.20

-5.60%

A New Beginning

Buy: Indostar Capital Finance Ltd.

Motilal Oswal

IndoStar Capital Finance 16 April 2019 IndoStar Capital NBFC Traditionally a wholesale lender, INDOSTAR hired Mr Sridhar as Executive VC & CEO to lead its retail lending foray. Over the past few years, retail lending has gained traction and accounts for 42% of INDOSTARs overall loan book. In the corporate finance segment, INDOSTARs focus has remained on ~50 clients over the past few years, which has helped in better monitoring of accounts. However, in its SME lending book, INDOSTAR has witnessed an increase in the GNPL ratio to 3.2%. The companys other two businesses, vehicle and housing finance, have only commenced in last one year, and thus, yet to see the impact of seasoning of portfolio. These businesses have negligible NPLs. However, as the vehicle finance book scales up, we expect the GNPL ratio to reach 2% and credit costs of ~1%. We believe the company is better placed now and can focus on growth.

Indostar Capital Finance Ltd. is trading above its 200 day SMA of 288.6

Indostar Capital Finance Ltd.

25 Mar 2019

308.20

-5.60%

IndoStar Capital Finance (Initiating Coverage): Nimble footed lending. BUY

Buy: Indostar Capital Finance Ltd.

HDFC Securities

Initiate coverage with a BUY (TP of Rs 549, 1.5xMar-21E ABV of Rs 366). Promoted and run by professionals, Indostar Capital Finance (INDOSTAR) is an NBFC, with a presence spanning multiple segments (unlike other NBFCs with a monoline business). After commencing operations as a special situation corporate and developer financier, INDOSTAR managed to pull off a transition to retail lending (fashionable).

Indostar Capital Finance Ltd. is trading at high volume of 797.7K with price loss of -5.60.

Indostar Capital Finance Ltd.

17 Sep 2018

308.20

-5.60%

Indostar Capital Finance - High growth + low valuations l!!

Buy: Indostar Capital Finance Ltd.

LKP Securities

and increase the size of non-corporate loans sizeably going forward. In the next 5 years, it aims AUM mix of VF 35%, corporate loans 35%, SME 15% and housing loans 15%. Over the FY18-22E period, we anticipate AUMs to grow at 50% CAGR which would be mainly driven by vehicle finance loans. Operating leverage set to play out in the longer run, boosting return profile of the...

Indostar Capital Finance Ltd.'s price crossed below 50Day SMA today

Indostar Capital Finance Ltd.

30 Aug 2018

308.20

-5.60%

Indostar Capita

Buy: Indostar Capital Finance Ltd.

Centrum Broking

(valued at 1.7x FY20E ABV). IndoStar has embarked on a transformational journey and with the right mix of people, product portfolio, processes and the required infrastructure, we believe the business model is on the right growth path. We expect IndoStar Capital to report (a) strong earnings profile (38% / 22% CAGR in revenue / earnings over FY18-20E), (b) limited asset quality risks (given the history of near zero NPAs), and (c) superior returns profile (RoA at 2.7%, RoE at 10%+ by end-FY20E). Healthy capital position (CAR at 28%+) will supplment sturdy 45% CAGR in AuM over FY18-20E. Further, proficient senior management with an element of skin in the game through ESOPs and superior board...