Magma Fincorp (MGMA IN) Q1FY18 earnings: Strong performance; Stable asset quality amid a seasonally weak quarter

Posted by: at 8/02/2017 05:41:00 am
Magma Fincorp (MGMA IN) Q1FY18 earnings: Strong performance; Stable asset quality amid a seasonally weak quarter  

** Net Op. Inc. +3% yoy (+2% qoq) at Rs3.09bn – 3% above expectations – calculated NIMs expanded c.110+bp yoy @ 7.8%
** Opex +8% yoy (+13% qoq) at Rs1.7bn
** Op. Profit +3% yoy (-5% qoq) at Rs1.6bn – in line with expectations
** Provisions +4% yoy (-5% qoq) at Rs914mn – includes Rs103mn additional provision towards 90-dpd NPL recognition
** PAT -4% yoy to Rs452mn – 6% above estimates
** GNPLs now stand at 7% vs 6.7% in Q4FY17 – Absolute gross NPLs are flat qoq , however due to reduction in AUMs the % GNPL looks higher qoq – PCR improved to 20% from 17.7% in Q4FY17  
** AUMs declined 13% yoy (-4% qoq) to Rs154bn

At Rs170, the stock trades at 1.7x FY19E BV and 18x FY19E EPS. We currently have a BUY rating with a target price of Rs150. We will review our estimates and rating post the conference call tomorrow at 11.00am. Dial-in: 91 22 3960 0646

Magma Fincorp (MGMA IN) Q1FY18 earnings: Strong performance; Stable asset quality amid a seasonally weak quarter







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