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Motilal Oswal Report
Domestic brokerage firm Motilal Oswal has reiterated its Buy rating on Northern Arc Capital Ltd. with a target price of Rs 405, based on 1.3 times FY28E price/book-value.
According to the brokerage, Northern Arc is transitioning from an intermediary-led credit platform into a diversified D2C-led financial services franchise.
Multiple growth engines, an expanding capitallight credit solutions ecosystem, operating leverage, and normalising credit costs should enable PAT growth to materially outpace AUM growth, driving a structural improvement in return ratios.
The stock trades at 1.1x FY27E P/BV. The brokerage models an AUM/PAT CAGR of ~21%/33% over FY26-28E, with an RoA/RoE of ~3.2%/15% in FY28.
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