Emkay Global has given a hold rating to Magma Fincorp with a target price of Rs 42. The share price moved up by 2.24 per cent from its previous close of Rs 40.20. The stock’s last traded price is Rs 41.10.

Magma Fincorp Ltd., incorporated in the year 1978, is a Small Cap company (having a market cap of Rs 1091.58 Crore) operating in NBFC sector.

Financials
For the quarter ended 30-09-2020, the company reported a Consolidated sales of Rs 593.87 Crore, up 4.95 % from last quarter Sales of Rs 565.88 Crore and down -10.40 % from last year same quarter Sales of Rs 662.79 Crore Company reported net profit after tax of Rs 34.38 Crore in latest quarter.

magma

Investment Rationale
In view of the uncertainties, the brokerage keeps loan growth expectations realistic despite attractive valuations. Considering the run-down of the traditional book, despite the normalization in demand, it believes that AUM growth pressure is here to stay. It increases FY21/22 EPS estimates by ~16.8/15.4%. It maintains Hold and UW position in EAP, with a TP of Rs42 (Rs31 earlier), corresponding to ~0.4x P/Adj. book FY23E. Key risk to the call is a positive surprise on the asset-quality front.


Promoter/FII Holdings
Promoters held 24.4 per cent stake in the company as of Sept 30, 2020, while FIIs held 32.3 per cent, DIIs 26.9 per cent and public and others 16.4 per cent.





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