HDFC Securities: Indostar Capital Finance’s Asset Quality Risks Remain Elevated 
A customer counts Indian rupee banknotes in the Byculla area of Mumbai, India. (Photographer: Dhiraj Singh/Bloomberg)

HDFC Securities: Indostar Capital Finance’s Asset Quality Risks Remain Elevated 

BQ Blue’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages. These reports offer BloombergQuint’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.

HDFC Securities Report

Indostar Capital Finance Ltd.’s first quarter earnings came in above estimates due to lower-than expected operating and tax expenditure.

The company is now well-positioned on the liquidity, capital and funding fronts, as a result of the equity infusion by Brookfield Asset Management Company.

While the retail portfolio under moratorium registered a sharp fall, the corporate portfolio under moratorium was sticky, which would keep asset quality risks and provisions elevated and return ratios subdued in the near term.

Net interest income grew 10.4% QoQ to Rs 1.34 billion and was in line with estimates. Pre-provision operating profit, at Rs 737 million (down 38% YoY), was 14.7% ahead of estimates due to better-than-expected cost control. Profit after tax was 57% higher than estimates, as tax costs fell sharply.

Click on the attachment to read the full report:

HDFC Securities Indostar Capital Finance Q1FY21 Results Update.pdf

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