Initiating Coverage Report: BFSI Multi-Segment Company

Hardi contributed to an initiating coverage report on a multi-segment BFSI company at Investec, working alongside a senior associate who guided the overall direction of the project.

He took ownership of several sections of the report, including the industry overview, portions of the company analysis, ESG section, management details, and peer comparisons. The company covered had five distinct business segments, which meant no single listed peer could serve as a direct comparable across the board.

Hardi structured the peer comparison by segment, identifying relevant listed companies for each of the five lines of business based on business model similarity and company size. For the wealth management segment, for example, he identified peers providing comparable wealth management services and benchmarked them against that specific segment of the subject company.

After the report was drafted, the team shared it with the company for feedback. The company flagged two areas where the analysis needed revision. In the asset services segment, the team had not fully understood the revenue recognition methodology, and the company walked them through how revenues were actually booked.

In the wealth and private management segment, the team had modelled revenues based on total client count, but the company clarified that revenues were concentrated among a smaller subset of clients. They provided the relevant concentration data, which Hardi and the team used to revise the revenue estimates. The revision resulted in a reduction in projected revenues and a corresponding adjustment to the company's valuation.