Geojit Financial Services - Growth continues in MF segment, while other segments slow down - Earnings update - CSEC Research

- Geojit's AUM grew by (18.5% YoY, 4.3% QoQ) to~ INR 350bn, with Depository assets (Asset under Holding) noted at INR 302bn. Book size of Mutual fund SIP has grown at a robust rate of 172% YoY and now stands at INR 1.26bn.

- No. of Mutual fund folio has increased to 401,000 from 290,000 in 2QFY17 with Mutual fund book growing at 38.3% YoY.

- Management highlighted that about 65% of the retail volume are done via the Internet by branches (Including the mobile application).

- Consolidated total income from operations increased (8.6%YoY, 4.4%QoQ) to INR 794mn. Standalone Broking & related income grew (10%YoY, 5%QoQ) to INR 723mn amidst marginal increase in yields. Consolidated other income grew by (3.5%YoY) to INR 80.1mn in 2QFY18.

Valuation: Currently the stock is trading at 5.1x P/BV of FY19E. Strengthening of the equity markets going ahead would push the volume growth and is expected to bid well for the company. However, the positives are already factored in the stock price. Consequently, we rate the stock a MARKETPERFORMER and arrive at target price of INR 126, assigning a P/BV of 4.8X FY19E.

Risks: Cyclicality of broking income, muted performance of overseas subsidiaries and stiff competition from discount brokers.

Shares of Geojit Financial Services Ltd was last trading in BSE at Rs.129.95 as compared to the previous close of Rs. 133.1. The total number of shares traded during the day was 38464 in over 456 trades.

The stock hit an intraday high of Rs. 135.55 and intraday low of 129. The net turnover during the day was Rs. 5075955.

Source : Equity Bulls

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