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Equifax Serious on Indian Market
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ShareBusiness and credit information provider Equifax Inc. (EFX - Analyst Report) is expanding its business operations in India. The company has made necessary arrangements to provide detailed credit information to its clients, by gathering relevant credit data from some of the largest banking and financial institutions of the country.
The company has entered into a joint venture (JV) agreement, with six of India’s largest banks and financial institutions such as Bank of India, Kotak Mahindra Prime Limited, Bank of Baroda, Religare Finvest Limited, Sundaram Finance Limited and Union Bank of India. This apart, Equifax has also applied for registration with the Reserve Bank of India (RBI), to establish a new credit information company, as required under the Credit Information Companies (Regulation) Act. The JV will provide services to clients across India.
We believe that the company has entered the Indian market at the perfect juncture. The economy is growing at a fast pace and many corporate entities are subscribing to credit information services in an attempt to mitigate risk. Equifax has a dedicated team of professionals and good infrastructure, which should enable it to provide an updated credit information solution to clients.
The company seems to be on an expansion mode as it is rolling out new products and services to attract customers across segments. Apart from large corporate clients, the company is launching new products to get a firm grip on the Small and Medium Business market.
For this purpose, Equifax has launched a new website (equifaxsmallbusiness.com). Through this website, customers can purchase credit reports of 25 million firms, thereby coming to an informed decision regarding the credit worthiness of parties they intend to do business with. The website is also expected to supply smaller companies with information that could help them reduce losses.
Moreover, Equifax is focusing more on its core competency, selling all the assets of its Direct Marketing Services division to Alliance Data Systems for $117.0 million. The company expects to use the proceeds to expand its business and meet other general corporate obligations.
We believe Equifax is well positioned to benefit from its leadership in important markets and the diversification of its client portfolio should enable it to aggressively expand its operations in the high-growth Asian markets.
Equifax performed well in the second quarter, and witnessed both top-line and bottom-line growth. Equifax’s core business remains solid and with the sale of its direct marketing division, the company would be able to focus more on its main business.
However, given the strong correlation with consumer and financial markets, as well as the company’s U.S. exposure, we expect only gradual improvement in results, keeping pace with the country’s economic recovery and the revival in the financial services market.
We currently have a short-term Hold rating on Equifax, equating to a Zacks Rank of #3.
Read the full analyst report on EFX
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