Equitas Holding (EQUITAS) posted a 3QFY18 loss of Rs 300mn (EE PAT: Rs 200mn) dragged by elevated provisions towards its stressed MFI exposure, which took the MFI NPA provision coverage ratio to ~96%. AUM/loan growth picked up qoq to 5%/12% while accretion to deposits/CASA was healthy at 19%/38% qoq. We had been REDUCE on EQUITAS given concerns on (i) weak loan/income growth as it looked to run down its MFI book, (ii) an increase in the C/I ratio driven by SFB transition and (iii) possible volatility in NPA trends as sourcing/appraisal process of new asset products stabilize. However, we derive comfort from management’s guidance on the rundown in MFI loans being now complete, and opex growth stabilizing. We thus upgrade EQUITAS to ADD with a revised Mar’19 TP of Rs 170 (Sep’18 TP of Rs 135 earlier) set at 2.6x/2.3x FY19E/FY20E ABV.