Equitas SFB Shares: Shares of Equitas Small Finance Bank were listed in the domestic market about four years ago and IPO investors are currently in profit of 158 percent. In January this year, it reached a one-year high but it is currently down by about 27 percent from this high and analysts are seeing it as a great buying opportunity. According to brokerage firm ICICI Securities, it can jump by about 17 percent from the current level. Currently, it is at Rs 85.22 on BSE. Shares of Equitas Small Finance Bank have strengthened by about 5 percent this month.
What is the brokerage opinion on Equitas SFB?
According to domestic brokerage firm Motilal Oswal, the business growth of Equity Small Finance Bank was strong in FY 2022-FY 2024. During this period, the loan book of SFB grew at a compound annual growth rate (CAGR) of 26 per cent and deposits at a CAGR of 38 per cent. Due to this strong growth, the credit-deposit ratio of the bank improved from 86 per cent in FY 2022 to 102 per cent in FY 2024 and the retail deposit mix also increased to 69 per cent.
Pressures in the microfinance institution segment have impacted profitability, but MFI business exposure declined from 19 per cent to 17 per cent during this period. According to the brokerage, asset quality may improve in the second half of this financial year 2025.
The brokerage believes that its loans can grow at a CAGR of 23 percent by FY 2026 and RoA (return on assets) can improve to 1.7 percent. This will also support the shares as improvement in asset quality will increase investor confidence. Considering all these things, the brokerage has given it a buy rating at a target price of Rs 100.
Shares were listed four years ago
Shares of Equitas Small Finance Bank were listed in the domestic market on 2 November 2020, about four years ago. Its shares were issued to IPO investors at a price of Rs 33, that is, IPO investors are in profit of more than 158 percent. Talking about the movement of shares in one year, it was at a one-year high of Rs 116.50 on 12 January 2024. It fell by about 36 percent in 7 months from this level to a one-year low of Rs 74.60 on 14 August 2024. It has recovered more than 14 percent from this low level, but it is still about 27 percent downside from one-year high. According to the brokerage, it can still recover 17 percent more.
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