Equity L/S Analyst | Forensic Accounting | India, Yellowstone Equity

Ankit Agrawal, CFA

Equity L/S Analyst | Forensic Accounting | India

Creating Wealth through Alpha and Compounding

Yellowstone Equity

Providing unbiased and independent research on Indian equities to global institutions and individual investors


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Regulatory Disclosure: 
Note that Ankit Agrawal (Proprietor of Yellowstone Equity) is a SEBI registered Research Analyst (Registration No.: INH000007216). Registration granted by SEBI and certification from NISM in no way guarantee performance of the intermediary or provide any assurance of returns to investors. Investment in securities market are subject to market risks. Read all the related documents carefully before investing.

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Compliance/Grievance Officer:
Name: Ankit Agrawal
Email: services@yellowstoneequity.com
Mobile: +91-7575817289
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Equity Bottom-Up

Edelweiss Financial Services / Equity Bottom-Up

<ul>
<li>
<a href="https://www.smartkarma.com/entities/edelweiss-financial-services-ltd" target="_blank" data-smartkarma-citation="entities:15015:1" rel="noopener">Edelweiss Financial Services ("Edelweiss")</a> reported a steady Q3FY24 led by robust profitability from across businesses except insurance, which is in gestation phase. All its businesses are scaling up well.</li>
<li>Edelweiss' credit business reported good traction in co-lending. 80% and 32% of the disbursals in the NBFC and the HFC businesses, respectively, came from co-lending. </li>
<li>Within the asset management vertical, the mutual fund business is growing well with 23% YoY growth in overall AUM and 47% YoY growth in equity AUM.</li>
</ul>



Edelweiss Financial Services ("Edelweiss") reported a steady Q3FY24 led by robust profitability from across businesses except insurance, which is in gestation phase. All its businesses are scaling up well.
Edelweiss' credit business reported good traction in co-lending. 80% and 32% of the disbursals in the NBFC and the HFC businesses, respectively, came from co-lending. 
Within the asset management vertical, the mutual fund business is growing well with 23% YoY growth in overall AUM and 47% YoY growth in equity AUM.


<ul>
<li>Edelweiss reported a decent Q2FY24 with ex-Insurance PAT of INR 153cr vs INR 133cr YoY. All the businesses - ARC, Asset Management and Credit - performed well.</li>
<li>Edelweiss is making decent progress in the Credit business aided by the co-lending business model. 80% of disbursals in NBFC and 30% in Housing Finance in Q2FY24 were through co-lending.</li>
<li>Edelweiss is in process of selling a minority stake in its Alternative Asset Management business for value unlocking. It plans to sell 10-20% equity stake for INR 1500-2000cr.</li>
</ul>


Edelweiss reported a decent Q2FY24 with ex-Insurance PAT of INR 153cr vs INR 133cr YoY. All the businesses - ARC, Asset Management and Credit - performed well.
Edelweiss is making decent progress in the Credit business aided by the co-lending business model. 80% of disbursals in NBFC and 30% in Housing Finance in Q2FY24 were through co-lending.
Edelweiss is in process of selling a minority stake in its Alternative Asset Management business for value unlocking. It plans to sell 10-20% equity stake for INR 1500-2000cr.


Edelweiss: Hitting All the Right Notes to Scale Up Businesses and Unlock Value

<ul>
<li>Edelweiss' credit business is now normalizing with GNPA at 2.5% and NNPA at 1.8%. Credit costs came in negative as asset quality is improving and excess provisioning is being normalized. </li>
<li>Rest of the businesses continue to scale up well. Edelweiss is among the fastest grower in the mutual fund and insurance businesses. Wealth Management business continues to do well.</li>
<li>At current valuation, Edelweiss is available cheap and as per our estimates, an investment in it has potential to more than quadruple by the end of FY25.</li>
</ul>


Edelweiss' credit business is now normalizing with GNPA at 2.5% and NNPA at 1.8%. Credit costs came in negative as asset quality is improving and excess provisioning is being normalized. 
Rest of the businesses continue to scale up well. Edelweiss is among the fastest grower in the mutual fund and insurance businesses. Wealth Management business continues to do well.
At current valuation, Edelweiss is available cheap and as per our estimates, an investment in it has potential to more than quadruple by the end of FY25.


Edelweiss: Credit Business Is Normalizing; Rest of the Businesses Are Scaling Up Well

<ul>
<li>Edelweiss reported a strong Q1FY24 earnings led by its asset management and ARC businesses. In particular, the asset management business is scaling up well for Edelweiss.</li>
<li>In the ARC business, Edelweiss saw strong recoveries during Q1FY24. Also, gradually, Edelweiss is scaling up the retail ARC business.</li>
<li>The credit business continues to see reduction in the wholesale loan book AUM. Asset quality remains stabilized and the co-lending model is helping Edelweiss to grow well.</li>
</ul>


Edelweiss reported a strong Q1FY24 earnings led by its asset management and ARC businesses. In particular, the asset management business is scaling up well for Edelweiss.
In the ARC business, Edelweiss saw strong recoveries during Q1FY24. Also, gradually, Edelweiss is scaling up the retail ARC business.
The credit business continues to see reduction in the wholesale loan book AUM. Asset quality remains stabilized and the co-lending model is helping Edelweiss to grow well.


<ul>
<li>Edelweiss reported a decent Q4FY23. Across businesses, Edelweiss reported strong growth. The credit business is also now scaling up with Q4FY23 disbursements at INR 400cr in housing finance.</li>
<li>The demerger of Nuvama Wealth Management is now complete with record date as Jun 2 2023. Nuvama is on track to list on the exchanges by the end of July.</li>
<li>Based on our sum-of-the-parts valuation, Edelweiss can be valued at INR 15000cr+. At the current market cap of INR 4400cr, it is trading at a huge discount of 70%+.</li>
</ul>


Edelweiss reported a decent Q4FY23. Across businesses, Edelweiss reported strong growth. The credit business is also now scaling up with Q4FY23 disbursements at INR 400cr in housing finance.
The demerger of Nuvama Wealth Management is now complete with record date as Jun 2 2023. Nuvama is on track to list on the exchanges by the end of July.
Based on our sum-of-the-parts valuation, Edelweiss can be valued at INR 15000cr+. At the current market cap of INR 4400cr, it is trading at a huge discount of 70%+.


Edelweiss: Retail Credit Business Is Now Scaling Up | Rest of the Businesses Continue to Grow Strong

India

Edelweiss Financial Services Ltd. provides financial services.  The Company offers financial services including lines of credit, investment banking, institutional and retail broking, financial planning, asset advisory, life insurance, and investment management services.

Edelweiss Financial Services (EDEL IN)

Edelweiss: Scaling Up Well

Edelweiss is scaling up all its businesses well. The credit business is also turning around now. At the current valuation, an investment in...

Ankit Agrawal, CFA

Edelweiss: Hitting All the Right Notes to Scale Up Businesses and Unlock Value

Edelweiss reported a decent Q2FY24. All its businesses are scaling up well leading to improved profitability and growth. Credit business is also...

Ankit Agrawal, CFA

Edelweiss: Credit Business Is Normalizing; Rest of the Businesses Are Scaling Up Well

Edelweiss' credit business is normalizing. Rest of the businesses are also scaling up well. At current valuation, Edelweiss is available cheap and...

Ankit Agrawal, CFA

Edelweiss: Ripe for Re-Rating

An investment in Edelweiss' stock at the current levels has potential to more than triple over a holding period of 3 to 5 years. The worst is over...

Ankit Agrawal, CFA

Edelweiss: Retail Credit Business Is Now Scaling Up | Rest of the Businesses Continue to Grow Strong

An investment in Edelweiss at the current market cap of INR 4400cr has potential to more than triple. Credit business is now scaling up. Rest of...

Ankit Agrawal, CFA