SBFC Finance Q4 Results Review: ICICI Securities Maintains 'Buy' Rating, Hikes Target Price

SBFC believes that its prudent lending approach since the past six–nine months would enable steady asset quality; its expanded distribution network too should bolster 5–7% QoQ growth in the near term..NDTV Profit’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer NDTV Profit’s subscribers an opportunity to expand their understanding of companies, sectors and the economy..ICICI Securities Report.Q4 FY25 marks eight straight quarters of strong financial performance and effective execution at SBFC Finance Ltd. This is evident in its AUM growth outshining the guided range of 5–7% QoQ, better opex to AUM at 4.65% in FY25 versus 5.34% in FY24, and credit cost at 80–100bps as envisaged earlier, despite the operating environment being mired in tight liquidity, higher delinquencies in unsecured loans and the rising rate cycle. With Q4 FY25 RoE at ~12%, up ~200bps since Q4 FY23, SBFC remains on track to achieve ~15% RoE by Q4 FY26. While asset quality is stable with GNPL at 2.74% versus 2.7% QoQ, increase in 1+ DPD to ~7% in Q4 FY25 versus 6.5% in Q3 FY25 versus 5.6% in Q4 FY24 raises concern over near-term asset quality. However, management sounds confident of maintaining credit cost at 80–100bps ahead. While management highlighted that underwriting standard (lower FOIR, LTVs etc.) has been tightened owing to some stress in select customer segments and areas, it does not foresee any risk to delivering on the earlier-envisaged target of >15% RoE by Q4 FY26. .SBFC believes that its prudent lending approach since the past six–nine months would enable steady asset quality; its expanded distribution network too should bolster 5–7% QoQ growth in the near term. Thus, we retain Buy, with a revised target price of Rs 125 (versus Rs 115), as we roll over to Sep’26E BVPS, valuing the stock at 3.5x versus 4x Sep’25E BVPS..Click on the attachment to read the full report:.Aditya Birla Sun Life Q4 Results Review: Motilal Oswal Maintains 'Buy' Rating; Sees 21% Upside — Here's Why.DISCLAIMERThis 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.

SBFC Finance Q4 Results Review: ICICI Securities Maintains 'Buy' Rating, Hikes Target Price

SBFC's operating efficiencies and stable asset quality will continue drive profitability, says ICICI Securities, maintaining 'Buy'

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