Sie sind auf Seite 1von 4

ANTIQUE STOCK BROKING LIMITED FROM THE RESEARCH DESK 8 August 2019 | 1

Current Reco : HOLD 1QFY20 RESULT REVIEW


Previous Reco
CMP
: HOLD
: INR278
Ujjivan Financial
Target Price : INR296 Strong growth, but other challenges remain
Potential Return : 7% Quarterly performance - lower opex shores profits
https://www.euromoney.com/Brokers n AUM growth YoY = 51%
Asiamoney Brokers’ Poll 2019
https://www.euromoney.com/Brokers
https://www.euromoney.com/Brokers NII growth YoY = 41%
P Vote for ANTIQUE
https://www.euromoney.com/Brokers
https://www.euromoney.com/Brokers
n
https://www.euromoney.com/Brokers
https://www.euromoney.com/Brokers n PPoP growth YoY = 91%
Voting closes on 16th August
https://www.euromoney.com/Brokers
n Profits growth YoY = 79%
Digant Haria
+91 22 4031 3422 n NIM level = 10.9% in Jun19 vs. 12.8% in Jun18
digant.haria@antiquelimited.com n GNPA = 0.8% in Jun19 vs. 0.9% in Mar19
Bhavik Mehta n CASA share = 6.7% in Jun19 vs. 6.5% in Mar19
+91 22 4031 3397
bhavik.mehta@antiquelimited.com Analysis of result
Vidhi Shah While asset growth was strong, margin adjustments have started owing to larger proportion
+91 22 4031 3467
vidhi.shah@antiquelimited.com
of non-MFI portfolio. Operating cost was lowest in many quarters, driving record profits. The
current quarter saw sharp improvement in C/I run-rate at 66%, which was mainly due to
Market data benign income and some cost saving initiative, however management is still guiding C/I to
Sensex : 36,691 stands at 73 - 75%. Asset quality trends remains healthy for now.
Sector : NBFC
Migration to small finance bank
Market Cap (INRbn) : 33.8
Market Cap (USDbn) : 0.477 With the branch role out plan coming to an end in Q3FY19, focus has now shifted to scaling
O/S Shares (m) : 121.4 up retail deposit which has increased from INR42mn to INR55mn per branch. Ujjivan's
52-wk HI/LO (INR) : 407/167 strategy around retail term deposits would be to offer higher interest rates while strategy
Avg Daily Vol ('000) : 4,907 around savings deposits would be to offer complete package of debit card, app based
Bloomberg : UJJIVAN IN support and better segmental targeting.
Source: Bloomberg
Mar-18 Jun-18 Sep-18 Dec-18 Mar-19 Jun-19
Valuation
Bank Branches 187 275 367 464 474 474
FY19 FY20e FY21e
EPS (INR) 12.4 16.2 26.0 CASA per branch - Inr mn 7.4 8.7 10.3 12.1 16.5 17.4
P/E 22.4 17.2 10.7 Retail Deposit per branch - Inr mn 15.5 18.6 25.5 29.8 41.2 55.2
P/BV 1.8 1.6 1.4 CASA+ Retail TD as % of total borrowing 5.6 9.6 15.4 21.0 22.9 28.0
RoA (%) 1.3 1.2 1.6 Source: Company, Antique

RoE (%) 8.3 9.9 14.1


Source: Company, Antique
Long term view - Few more battles before glory
Returns (%) While it's heartening to witness the strong revival in asset growth, scale up in liabilities and
1m 3m 6m 12m progress on the cost front remains important variable to watch for. Although Ujjivan follows
Absolute (5) (10) (3) (28) best-in-class processes when it comes to microfinance, pockets of over-leveraging are already
Relative 3 (7) (2) (26) visible in this space and it won't be easy for a pan India player like Ujjivan to remain totally
Source: Bloomberg insulated in case of any adverse event. Current valuations at 1.4x on FY21e book are
reasonable but re-rating will hinge on clarity around bank listing, management's ability to
Shareholding pattern
scale up its branch business and manage risks in MFI business. Maintain HOLD rating with
Promoters : - price target of INR296 per share.
Public : 100% Key financials (consolidated)
Others : - FY17 FY18 FY19 FY20e FY21e
Source: Bloomberg Net interest income (INRm) 6,831 9,054 11,995 16,867 21,505
Net Profit (INRm) 2,077 259 1,505 1,957 3,153
Price performance vs Nifty
% growth 17.2 (87.5) 480.1 30.1 61.1
120
EPS (INR) 17.4 2.1 12.4 16.2 26.0
100
80 BV (INR) 147.1 143.3 155.0 171.1 197.2
60 P/E 16.0 129.5 22.4 17.2 10.7
40 P/BV 1.9 1.9 1.8 1.6 1.4
Aug-18 Dec-18 Apr-19 Aug-19 RoA (%) 2.9 0.3 1.3 1.2 1.6
Ujjivan Financials NIFTY RoE (%) 14.1 1.5 8.3 9.9 14.1
Source: Bloomberg, Indexed to 100 Source: Company, Antique
ANTIQUE STOCK BROKING LIMITED FROM THE RESEARCH DESK 8 August 2019 | 2

Quarterly performance
INR million Jun-18 Jun-19 % YoY
NII 2,647 3,723 40.6
PPP 763 1,458 91.1
PAT 463 830 79.3

INR million Jun-18 Jun-19 % YoY


AUMs 77,870 117,830 51.3
Microfinance - Group loans 63,380 84,440 33.2
Microfinance - Individual loans 6,830 9,270 35.7
MSE 2,800 6,860 145.0
Housing 4,170 10,070 141.5

Jun-18 Jun-19 % YoY


Disbursements 20,730 29,580 42.7
Microfinance - Group loans 17,200 20,920 21.6
Microfinance - Individual loans 1,510 2,300 52.3
MSE 760 1,410 85.5
Housing 1,080 2,050 89.8

(%) Jun-18 Jun-19 bps


GNPA 2.70 0.80 (190)
NNPA 0.30 0.30 -
Cost - to - income 74.2 65.8 (842)
Source: Company, Antique

Concall highlights
On business performance
Seeing good traction in the microfinance business and is optimistic about it continuance for
FY20. In west bengal region not witnessing any challenges yet, however keenly monitoring
political unrest if any emanates. The initiative like renegotiating long term contracts, improving
productivity and reengineering some processes and supply management has lead to 10%
cost saving for Q1.
On separate listing of SFB
Lengthy approval time taken by regulators, resulting into deadline breach. High cost in form
of taxes and stamp duty in other options. Hence Ujjivan, to comply with RBI guidance of
reducing promoter holding and listing SFB, has narrowed down to issuing fresh equity in SFB
through IPO route. However, any swift development in Equitas Scheme of arrangement may
prompt them to take that route.
ANTIQUE STOCK BROKING LIMITED FROM THE RESEARCH DESK 8 August 2019 | 3

Financials
Income statement (INRm) Growth indicators (%)
Year-ended March 31 FY17 FY18 FY19 FY20e FY21e Year-ended March 31 FY17 FY18 FY19 FY20e FY21e
Interest income 12,258 15,070 19,265 26,578 34,605 AUMs 18.4 18.5 46.2 36.0 35.0
Interest expenses 5,427 6,016 7,270 9,711 13,099 NII 34.6 32.6 32.5 40.6 27.5
Net interest income 6,831 9,054 11,995 16,867 21,505 PPP 33.5 (29.2) (4.0) 53.3 53.8
Processing fees 776 78 265 397 536 PAT 17.2 (87.5) 480.1 30.1 61.1
Others 460 - - - -
Other income 483 299 606 910 1,092 Operating efficiency
Total income 8,549 9,431 12,866 18,173 23,133 Year-ended March 31 FY17 FY18 FY19 FY20e FY21e
Employee Benefits Expenses 2,716 3,734 5,405 7,459 8,951 Operating cost to income 53.6 70.2 79.0 77.2 72.5
Other Expenses 1,738 2,473 4,156 5,818 6,982 Operating cost to AUM 7.8 9.5 10.9 10.8 9.5
Depreciation and Amortisation Expense 126 414 606 758 833
Operating expenses 4,580 6,621 10,167 14,035 16,766
Asset quality
Pre provisioning profits 3,969 2,811 2,699 4,138 6,366
Year-ended March 31 FY17 FY18 FY19 FY20e FY21e
Gross NPA 164.4 2,721.6 956.1 1,460.1 1,986.0
Provisions and Write Offs 751 2,364 658 1,173 1,589
Gross NPA / On-Book AUM (%) 0.3 3.6 0.9 1.0 1.0
Profit before tax & exceptional 3,217 446 2,041 2,965 4,777
Net NPAs 17.6 529.2 318.7 730.0 993.0
Profit before tax 3,217 446 2,041 2,965 4,777
Net NPAs / On-Book AUM (%) 0.0 0.7 0.3 0.5 0.5
Current Tax Expense 1,141 339 372 1,008 1,624
Credit Cost 1.3 3.4 0.7 0.9 0.9
Profit after tax 2,077 259 1,505 1,957 3,153

Balance sheet (INRm) Return ratios


Year-ended March 31 FY17 FY18 FY19 FY20e FY21e Year-ended March 31 FY17 FY18 FY19 FY20e FY21e
RoA 2.9 0.3 1.3 1.2 1.6
Share Capital 1,194 1,209 1,212 1,212 1,212
RoE 14.1 1.5 8.3 9.9 14.1
Reserves and Surplus 16,359 16,110 17,565 19,522 22,675
Tier 1 16.8 23.7 17.2 14.2 12.0
Networth 17,558 17,321 18,777 20,734 23,887
Borrowings 62,914 38,528 45,830 45,503 48,148
Margin analysis (%)
Deposits 1,064 37,726 72,592 102,499 150,436
Year-ended March 31 FY17 FY18 FY19 FY20e FY21e
TOTAL 84,786 95,224 140,259 173,169 228,235
Yield on loans 16.9 16.7 16.7 20.0 19.5
Fixed Assets 1,398 1,984 2,845 3,129 3,442
Cost of borrowing 10.0 8.5 7.5 7.4 7.4
Goodwill on Consolidation - - - 5 5
Spread 6.9 8.2 9.2 12.6 12.1
Deferred Tax Assets (Net) 470 920 759 759 759
NIMs 9.4 10.1 10.4 10.9 10.8
Cash and Cash Equivalents 7,601 6,131 10,973 14,791 16,192
Investments 14,467 12,441 15,478 7,400 7,943
Other operating details
Loans 58,712 73,226 109,305 146,006 198,600
Year-ended March 31 FY17 FY18 FY19 FY20e FY21e
Other Non-Current Assets 298 163 246 295 354
AUM 63,795 75,600 110,490 150,266 202,860
Other Current Assets 782 360 653 783 940
On-Book AUM 58,712 75,600 106,230 146,006 198,600
Short-Term Loans and Advances 839 - - - -
Off-Book AUM 5,083 - 4,260 4,260 4,260
Long-Term Loans and Advances 220 - - - -
Borrowings 65,042 76,255 118,422 148,002 198,584
TOTAL 84,786 95,224 140,259 173,169 228,235
Interest earning assets 85,862 94,172 136,941 172,457 226,995

Per share data Source: Company, Antique

Year-ended March 31 FY17 FY18 FY19 FY20e FY21e


No. of shares 119.4 120.9 121.2 121.2 121.2
EPS 17.4 2.1 12.4 16.2 26.0
BVPS 147.1 143.3 155.0 171.1 197.2
ABVPS 146.9 138.9 152.3 165.1 189.0
Source: Company, Antique
ANTIQUE STOCK BROKING LIMITED FROM THE RESEARCH DESK 8 August 2019 | 4

Important Disclaimer:

This report has been prepared by Antique Stock Broking Limited (hereinafter referred to as ASBL) to provide information about the company(ies) and/sector(s), if any, covered in the report and may be distributed
by it and/or its affiliated company(ies).

ASBL is a Stock Broker having SEBI Registration No. INZ000001131 and Depository Participant having SEBI Registration No. IN-DP-CDSL-726-2014 registered with and regulated by Securities & Exchange Board
of India.

ASBL and its affiliates are a full-service, integrated investment banking, investment management, brokerage and financing group.

This report is for personal information of the selected recipient/s and does not construe to be any investment, legal or taxation advice to you. This research report does not constitute an offer, invitation or inducement
to invest in securities or other investments and ASBL is not soliciting any action based upon it. This report is not for public distribution and has been furnished to you solely for your general information and should
not be reproduced or redistributed to any other person in any form. This report does not constitute a personal recommendation or take into account the particular investment objectives, financial situations, or needs
of individual clients. Before acting on any advice or recommendation in this material, investors should consider whether it is suitable for their particular circumstances and, if necessary, seek professional advice.
The price and value of the investments referred to in this material and the income from them may go down as well as up, and investors may realize losses on any investments. Past performance is not a guide for future
performance, future returns are not guaranteed and a loss of original capital may occur.

We and our affiliates have investment banking and other business relationships with a some companies covered by our Research Department. Our research professionals may provide input into our investment banking
and other business selection processes. Investors should assume that ASBL and/or its affiliates are seeking or will seek investment banking or other business from the company or companies that are the subject of
this material and that the research professionals who were involved in preparing this material may educate investors on investments in such business. The research professionals responsible for the preparation of
this document may interact with trading desk personnel, sales personnel and other parties for the purpose of gathering, applying and interpreting information. Our research professionals are paid on the profitability
of ASBL which may include earnings from investment banking and other business.

ASBL generally prohibits its analysts, persons reporting to analysts, and members of their households from maintaining a financial interest in the securities or derivatives of any companies that the analysts cover.
Additionally, ASBL generally prohibits its analysts and persons reporting to analysts from serving as an officer, director, or advisory board member of any companies that the analysts cover. Our salespeople, traders,
and other professionals or affiliates may provide oral or written market commentary or trading strategies to our clients that reflect opinions that are contrary to the opinions expressed herein, and our proprietary
trading and investing businesses may make investment decisions that are inconsistent with the recommendations expressed herein. In reviewing these materials, you should be aware that any or all of the foregoing
among other things, may give rise to real or potential conflicts of interest. ASBL and its affiliated company(ies), their directors and employees and their relatives may; (a) from time to time, have a long or short position
in, act as principal in, and buy or sell the securities or derivatives thereof of companies mentioned herein. (b) be engaged in any other transaction involving such securities and earn brokerage or other compensation
or act as a market maker in the financial instruments of the company(ies) discussed herein or act as an advisor or lender/borrower to such company(ies) or may have any other potential conflict of interests with
respect to any recommendation and other related information and opinions.; however the same shall have no bearing whatsoever on the specific recommendations made by the analyst(s), as the recommendations
made by the analyst(s) are completely independent of the views of the affiliates of ASBL even though there might exist an inherent conflict of interest in some of the stocks mentioned in the research report

Reports based on technical and derivative analysis center on studying charts company's price movement, outstanding positions and trading volume, as opposed to focusing on a company's fundamentals and,
as such, may not match with a report on a company's fundamental analysis. In addition ASBL has different business segments / Divisions with independent research separated by Chinese walls catering to different
set of customers having various objectives, risk profiles, investment horizon, etc, and therefore may at times have different contrary views on stocks sectors and markets.

Unauthorized disclosure, use, dissemination or copying (either whole or partial) of this information, is prohibited. The person accessing this information specifically agrees to exempt ASBL or any of its affiliates or
employees from, any and all responsibility/liability arising from such misuse and agrees not to hold ASBL or any of its affiliates or employees responsible for any such misuse and further agrees to hold ASBL or
any of its affiliates or employees free and harmless from all losses, costs, damages, expenses that may be suffered by the person accessing this information due to any errors and delays. The information contained
herein is based on publicly available data or other sources believed to be reliable. Any statements contained in this report attributed to a third party represent ASBL's interpretation of the data, information and/
or opinions provided by that third party either publicly or through a subscription service, and such use and interpretation have not been reviewed by the third party. This Report is not intended to be a complete
statement or summary of the securities, markets or developments referred to in the document. While we would endeavor to update the information herein on reasonable basis, ASBL and/or its affiliates are under
no obligation to update the information. Also there may be regulatory, compliance, or other reasons that may prevent ASBL and/or its affiliates from doing so. ASBL or any of its affiliates or employees shall not
be in any way responsible and liable for any loss or damage that may arise to any person from any inadvertent error in the information contained in this report. ASBL or any of its affiliates or employees do not
provide, at any time, any express or implied warranty of any kind, regarding any matter pertaining to this report, including without limitation the implied warranties of merchantability, fitness for a particular purpose,
and non-infringement. The recipients of this report should rely on their own investigations.

This report is intended for distribution to institutional investors. Recipients who are not institutional investors should seek advice of their independent financial advisor prior to taking any investment decision based
on this report or for any necessary explanation of its contents.

ASBL and it's associates may have managed or co-managed public offering of securities, may have received compensation for investment banking or merchant banking or brokerage services, may have received
any compensation for products or services other than investment banking or merchant banking or brokerage services from the subject company in the past 12 months.

ASBL and it's associates have not received any compensation or other benefits from the subject company or third party in connection with the research report.

Subject Company may have been a client of ASBL or its associates during twelve months preceding the date of distribution of the research report

ASBL and/or its affiliates and/or employees and /or relatives may have interests/positions, financial or otherwise of over 1 % at the end of the month immediately preceding the date of publication of the research
in the securities mentioned in this report. To enhance transparency, ASBL has incorporated a Disclosure of Interest Statement in this document. This should, however, not be treated as endorsement of the views expressed
in the report.

There are no material disciplinary action that been taken by any regulatory authority impacting equity research analysis activities

Analyst Certification

The views expressed in this research report accurately reflect the personal views of the analyst(s) about the subject securities or issues, and no part of the compensation of the research analyst(s) was, is, or will be
directly or indirectly related to the specific recommendations and views expressed by research analyst(s) in this report. The research analysts, strategists, or research associates principally responsible for preparation
of ASBL research receive compensation based upon various factors, including quality of research, investor client feedback, stock picking, competitive factors and firm revenues

Disclosure of Interest Statement Companies where there is interest

l Analyst ownership of the stock - No

l Served as an officer, director or employee - No

Regional Disclosures (outside India)

This report is not directed or intended for distribution to or use by any person or entity resident in a state, country or any jurisdiction, where such distribution, publication, availability or use would be contrary to
law, regulation or which would subject ASBL & its group companies to registration or licensing requirements within such jurisdictions.

For U.S. persons only: This research report is a product of Antique Stock Broking Limited, which is the employer of the research analyst(s) who has prepared the research report. The research analyst(s) preparing
the research report is/are resident outside the United States (U.S.) and are not associated persons of any U.S. regulated broker-dealer and therefore the analyst(s) is/are not subject to supervision by a U.S. broker-
dealer, and is/are not required to satisfy the regulatory licensing requirements of FINRA or required to otherwise comply with U.S. rules or regulations regarding, among other things, communications with a subject
company, public appearances and trading securities held by a research analyst account. This report is intended for distribution by Antique Stock Broking Limited only to "Major Institutional Investors" as defined
by Rule 15a-6(b)(4) of the U.S. Securities and Exchange Act, 1934 (the Exchange Act) and interpretations thereof by U.S. Securities and Exchange Commission (SEC) in reliance on Rule 15a 6(a)(2). If the recipient
of this report is not a Major Institutional Investor as specified above, then it should not act upon this report and return the same to the sender. Further, this report may not be copied, duplicated and/or transmitted
onward to any U.S. person, which is not the Major Institutional Investor. In reliance on the exemption from registration provided by Rule 15a-6 of the Exchange Act and interpretations thereof by the SEC in order
to conduct certain business with Major Institutional Investors, Antique Stock Broking Limited has entered into a chaperoning agreement with a U.S. registered broker-dealer, Marco Polo Securities Inc. ("Marco Polo").
Transactions in securities discussed in this research report should be effected through Marco Polo or another U.S. registered broker dealer.

SEBI Registration Number: INH000001089 as per SEBI (Research Analysts) Regulations, 2014.

CIN: U67120MH1994PLC079444
Antique Stock Broking Limited
20th Floor, A Wing, Naman Midtown
Senapati Bapat Marg, Elphinstone (West)
Mumbai 400013
Tel. : +91 22 4031 3444 • Fax : +91 22 4031 3445
www.antiquelimited.com