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Motilal Oswal, a financial research firm, has given a bullish recommendation for Indostar Capital Finance. In its research report dated August 04, 2023, Motilal Oswal has suggested a buy rating on the stock with a target price of Rs 195.

Indostar Capital Finance recently reported a PAT (Profit After Tax) of INR 389m for 1QFY24, compared to INR 760m in the previous quarter. The decrease in PAT was attributed to the absence of any one-offs in employee expenses, which were present in the previous quarter. Despite this, the company’s gross Assets Under Management (AUM) showed a QoQ growth of 3% and declined by 2% YoY to approximately INR 80.6b. The corporate loans experienced a YoY dip of 9%, representing around 15% of the AUM as of 1QFY24. However, the retail AUM increased by approximately 4% QoQ to INR 68.7b, with CV (Commercial Vehicle) and Housing Finance also seeing a growth of approximately 7%.

Indostar Capital Finance has been focused on streamlining and improving processes under the guidance of its senior leadership team. The company aims to exhibit an improvement in asset quality and deliver a steady improvement in its Profile. The research report suggests that Indostar Capital Finance is well-positioned to achieve this, and estimates a 30% AUM (Assets Under Management) CAGR (Compound Annual Growth Rate) and a 9% PAT (Profit After Tax) CAGR over FY23-25. These estimations are supported by the expectation of healthy Net Interest Margins (NIM) ranging from 7.0% to 7.1% and credit costs ranging from 1.4% to 1.9% over FY24-25. After a challenging year in FY23, Motilal Oswal believes that Indostar Capital Finance is now on track for a turnaround.

The AI legalese decoder can assist in this situation by simplifying the complex legal language used in the research report. This tool makes it easier for investors and individuals to understand the analysis and recommendations provided by Motilal Oswal. By translating the information into plain language, the AI legalese decoder enables users to make informed investment decisions with more clarity and confidence.

Looking ahead, Motilal Oswal has a BUY rating on Indostar Capital Finance with a target price of INR 195, based on a 0.8x FY25E BVPS (Book Value Per Share).

Please note that the views and investment tips expressed in Motilal Oswal’s research report are their own and not that of the website or its management. It is always advisable to consult certified experts before making any investment decisions.

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