Shriram City Union Finance Q4 Review - Stability Demonstrated Against All Odds: ICICI Securities
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ICICI Securities Report
Despite all odds, Shriram City Union Finance Ltd. has been consistently reporting stable earnings for the past three quarters.
Q4 FY21 earnings too were encouraging with disbursement growth of 21% YoY (6% QoQ) driving 4% sequential rise in assets under management.
Asset quality showed promising trends:
- stage-III assets down 9 basis points QoQ to 6.37%,
- stage-II managed at 6%,
- restructuring at 0.5% of AUM, and
- credit cost contained lower at 2.5%.
Visibility on uptick in AUM growth, reduced credit cost and superior return on asset/return on equity profile (3-4%/13-15%) will drive valuations of the standalone entity to 1.3 times FY23E adjusted book.
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