SBFC Finance Q4 Results Review- Steady Improvement In Profitability Along With Robust Growth: ICICI Securities

ICICI Securities Report

SBFC Finance Ltd. continued to sustain industry-leading financial performance with robust 9% QoQ/38% YoY assets under management growth, steady decline in cost-to-AUM – falling to 5.3% versus. 5.8% in FY23 – along with a greater then 50 basis points QoQ spread expansion during Q4 FY24.

Notably, while most of the financiers are finding it challenging to pass on borrowing rate hike, SBFC Finance is successfully navigating the increasing rate cycle, reflective in the cumulative 112 bps increase in asset yields (44 bps in Q4 FY24) versus. only 70 bps increase in funding cost during the past one year.

Sequential increase in gross non-performing assets ratio to 2.43% versus 2.38% QoQ, raises concern over sticky forward flows; however, management sounded confident about maintaining gross non-performing assets less then 2.5% going ahead as it derives comfort from improvement in collections to 98.3% versus. 97.5% QoQ and one plus days past due falling to 5.59% versus 5.61% QoQ.

Maintain 'Buy' with a target price of Rs 115, valuing the stock at four times September 25E book value per share.

Click on the attachment to read the full report:

DISCLAIMER

This report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit.

Users have no license to copy, modify, or distribute the content without permission of the Original Owner.