Daily Brief Financials: Utkarsh Small Finance Bank, Vista Land & Lifescapes, Square Inc, Pioneer Credit, Shui On Land, Realty Income, Metlife Inc and more

• Utkarsh Small Finance Bank (1639303D IN) IPO opens for subscription this week.
• The company currently is fifth largest SFB in India and has demonstrated robust growth in loan portfolio, deposits and improved productivity in the last two years.
• However, one must be cautious of the write offs worth INR 6 bn done in the last two years which benefitted the NPAs

We view Vista Land & Lifescapes (VLL) as “High Risk” on the LARA scale. This is mainly in consideration of the company’s weak financial profile, with high leverage and inadequate Cash/Short-term Debt coverage. Moreover, there are large ongoing related-party transactions. Positively, the company enjoys high margins. It also has a sizeable portfolio of investment properties and long-term securities investments, which supports the balance sheet and provides recurring income.

Our fundamental Credit Bias is “Negative”, considering the company’s track record of negative FCF generation and inadequate liquidity. Moreover, the challenging macroeconomic conditions (with rising costs and interest rates) may impact its margins and financing costs. That said, we believe VLL has good access to funding, which mitigates its debt repayment risk. In addition, we believe the controlling shareholders have a strong incentive to support VLL if needed.

We initiate coverage with a “Hold” recommendation on the VLLPM notes. We deem the yield unattractive. That said, market technicals appear robust, possibly supported by demand from private banks and local investors.

• Block’s share price has remained relatively flat over the past year, but that’s hardly good news.
• The highly supportive outside environment was not able to propel the share price anywhere near its previous highs.
• When adjusting for risks, Block remains as one of the worst performers within its peer group, according to analysts.

• Pioneer Credit Limited (ASX:PNC) was founded in 2009 and listed on the ASX in 2014.
• The company has grown to be one of the leading acquirers and managers of impaired credit in Australia by; maintaining strong customer engagement, an unblemished compliance record with ASIC, consistently good Net Promoter Score from customers and strong relationships with Australia’s largest bank and non-bank lenders.
• PNC currently purchases debt from 18 different vendor partners with long-term partnership purchasing arrangements in place with Commonwealth Bank of Australia (ASX:CBA). 

Lucror Analytics Morning Views comprise our fundamental credit analysis, opinions and trade recommendations on high yield issuers in the region, based on key company-specific developments in the past 24 hours. Our Morning Views include a section with a brief market commentary, key market indicators and a macroeconomic and corporate event calendar.

• Agung Podomoro Land
• Shui On Land

• A cyclical pivot within the retail space is likely as consumer sentiment in the U.S. and the United Kingdom has started recovering.
• Receding market risk premiums could lend the REIT the necessary latitude to gain value.
• Today we turn our attention to Realty Income Corporation (NYSE:O), a retail-centric Real Estate Investment Trust (“REIT”) known to many as the “monthly dividend company.”

• MetLife delivered a disappointing set of results as the company was unable to meet the revenue as well as the earnings expectations of Wall Street.
• The company achieved substantial revenue growth in the majority of its main businesses and markets, including Group Benefits, Asia, and Latin America.
• Furthermore, adjusted earnings for Retirement and Income Solutions was $400 million, a decrease from the previous year due to reduced variable investment income.