We downgrade to NEUTRAL with a lower TP of Rs 150 (2.25x FY19E ABV). Equitas 1QFY18 performance was muted, owing to the twin impact of a decline in growth of the MFI segment and higher operating costs of liability branches. Collection efficiency of the MFI book stood at 94.6%. Disbursements were almost flat QoQ, owing to caution exercised in the MFI portfolio. AUM declined marginally QoQ at Rs 70.4bn, while NII declined by 10.5/4.8% QoQ/YoY. Non-interest Income was up sharply, owing to PSLC fee income of Rs 600mn. Opex cost further increased by 17.5% QoQ, owing to the rollout of 51 new liability branches, along with new products.