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    Equitas Small Finance Bank – Is there an opportunity in the underperformance?

    The stock price will be driven by the twin engines of earnings and possible valuation rerating

    Madhuchanda Dey
    March 19, 2024 / 03:58 PM IST
    Equitas Small Finance Bank – Is there an opportunity in the underperformance?

    equitas

    PRO Only Highlights
    -      Quarterly performance largely backed by improved realisations
    -      Medium-term triggers China plus and protectionist measures for tyre industry
    -      Valuations not inexpensive; but improved medium-term outlook

    Highlights

    • Growth momentum continues

    • Diversified and de-risked book

    • Credit-to-deposit ratio moderating with deposits picking up

    • Margin weakens, but medium-term upside seen

    • Asset quality weakens, guidance positive

    • Headroom for RoA expansion and stock upside

    Equitas Small Finance Bank (CMP: Rs 94, Market Cap: Rs 10,701 crore) has underperformed the broad Nifty index in the past six months with a return of 7 percent,  against an 11 percent by Nifty, despite resilient growth and positive outlook on margin. Is the current consolidation therefore an opportunity?

    Growth

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