Disclaimer: Holding and bought today again. Will share concall notes shortly.In my opinion, it is quite undervalued in comparison to Arman and Credit. What is comforting is improving asset quality with very good collection efficiency. Credit cost also remains as per management guidance. Biggest holding in MFI space with Arman and credit access. I may be wrong in my understanding. Kindly take this with pinch of salt.
PAR 90 is peaked out, due to continuous effort by management, the heat of same is felt on increasing Opex which is need of hour to have good asset quality.Things still look haunted looking at pre-covid times what happens at loan book. Market is knowing this and that’s why discounting it.
Looking at Manappuram MFI Asirwad & Muthoot microfin,till now they have done very good job. I am fearing a lot in putting my hard earn money as they are not as renowned as Credit access and Arman. I am taking calculated risk here. My average buying price is 152.25. lower buying price will cover any margin for error and provide much needed margins of safety.
Let see where it ends. Will track business very closely.
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Disclaimer: Holding and biased. Will certainly prove beneficial for sector. Found useful for sharing.
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Implementation of guard rails will certainly hit the growth rate of business. Their rejection ratio of customers are increased by 4 % to around 72%. To further keep the growth momentum, management will open more branches close to 400. In short term it will increase cost to income ratio however improved asset quality will reduce credit cost.
Disclaimer: Holding and biased.
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Recent management meet. Holding and biased.
Finest thing done by management in this quarter is the increase of PCR. In lending business it’s good to be conservative. Today I read very good line, Good investment at big discount always come with some sort of discomfort or doubt, else there would be no discount.
No body knows anything about anything beyond a point. This line gives me comfort that we are very small in this vast universe and not much things are in our hand to control others than peace of mind and senses of satisfaction.
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Available much below book value. Stable asset quality. Good bargain. Invested. With the microfinance sector recovery it can do good.
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Why this stock is trading at just 0.6 Price to book
Even the worst of the worst affected microfinance companies like Spandana, fusion, utkarsh sfb are trading at higher valuation than Satin credit
Is there anything which I am missing ?
Can any expert point out?
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Even I spent long time undestanding that, I cound not come up with any convensing answer other than market is not notising et,
D - Building position.
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that is how market works, we never know when the big player put in bigger orders. Also it is part of small-cap which is hardly running, accept few sectors which also included finance, NBFC and banking.
P.S. - Invested and Biased. Not a SEBI registered, please do your own due diligence.
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In lending business, market always give good valuation to business which has seen multiple downcycle with good control over asset quality. That’s why satin is trading at such valuation. But also remember Good investment at big discount always come with some sort of discomfort, doubt or else there would be no discount.
Disclaimer: Invested and has become major part of portfolio at 145 rupees.
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Some anti-thesis pointers, in addition to the notes by above members
- Declining overall collection efficiency as of Q226 (from their investor presentation)
9mFY25 - 95.9
FY25 - 95.6
Q126 - 94
Q226 - 93.3
But, X bucket CE is holding in the range 99.3-99.8%. This means new loans are running smoothly. Older loans are still weakening and portfolio is not stabilized yet. Need to monitor this in Q3
- On medium term basis, before their next equity dilution, we would want the price to be above the book value. In their last dilution in Dec 2023, leverage was around 5.2x, currently it is at 3.68
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Good thread explaining the current turnaround in business. With GNPA reduction and PAR improvement, profit is bound to increase as credit cost reduces further. Overall satisfied with pace of recovery. There is not much to loose here. Risk reward ratio is favorable.
Disclaimer: Holding and biased from 140-150 share price. Constitute major part in MFI space followed by Northern Arc with Arman and credit access grameen. Rerating seems to be imminent. “Bhagwan ke ghar dere hai par andere nahi hai.”
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Q3 / 9M FY26 – Key Positives Worth Noting (Satin Creditcare)
After going through Q3 & 9M FY26 numbers, a few points stand out for long-term investors:
• Profitability has clearly stabilised. 9M FY26 PAT stands at ~₹165 cr, showing recovery after a difficult FY24–FY25 phase.
• Asset quality continues to improve with GNPA at ~3.34% and NNPA at ~1.10%, which is reasonable for a microfinance-focused lender.
• Provision coverage is healthy at ~67%, indicating conservative balance-sheet management.
• Capital position remains comfortable with CRAR ~14.6% and strong liquidity (LCR ~140%).
• No stressed loan acquisitions and no NPA loan sales during the quarter — book clean-up appears genuine.
While leverage remains inherent to the business model and MFI cyclicality cannot be ignored, the worst seems behind operationally.
For long-term investors, this looks more like an earnings recovery and gradual re-rating story, not a short-term trade.
Would like to hear how others are viewing FY27 earnings sustainability.
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Very valid questions asked by one of the persons in recent concall. With reduction in par number why you still guiding for 4 % credit cost? In my view , as soon as credit cost reaches to normalised value of 3.3 -3.4% , that will jack up the ROA close to 3 from current value of 2.2. Mr. Market can rerate satin from here. Satin P/B can reach to 1.3 to 1.8.
Disclaimer: Holding and biased and looking for interesting time ahead.
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