Reliance Capital - Core business metrics to the fore - Edelweiss

Reliance Capital's (RCap) Q3FY13 PAT of INR1bn was all about core business operations - after being volatile in the past few quarters due to one-offs (stake sale in core businesses, investment write-offs and third party motor claim reserves in general insurance). General insurance turned profitable in Q3FY13; however, NPLs in the consumer finance space posted a slight uptick.

AMCs revenues and expenses were volatile due to new income recognition guidelines and upfronting of marketing expenses. Profitability of other verticals was steady. Taking cognizance of inherent value in its life insurance and asset management businesses, coupled with scale up in consumer financing and stability in general insurance, we maintain 'BUY'.

Source : Equity Bulls

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