Khandwala bullish on SREI Infrastructure Finance

Broking house, Khandwala Securities is bullish on SREI Infrastructure Finance. It has recommended buy rating on the stock.

The Khandwala Securities report on SREI Infrastructure Finance:

“SREI Infrastructure Finance, SREI is a leading private sector infrastructure equipment, infrastructure project and renewable energy financing company operating across the country with a network of 43 branches and expanded its operations overseas.”

“SREI is the first Indian infrastructure financing company to be listed on the London Stock Exchange, LSE.”

Results Highlight

“The total income for FY2006 has increased by 75% on y-o-y basis to Rs 227.25 crore as compared to Rs 129.93 crore for FY2005. EBITDA and net profit have increased to Rs 184.38 crore and Rs 48.42 crore as compared to Rs 96.81 crore and Rs. 28.3 crore respectively.”

“The total income for H1 FY2007 has increased by 118% on y-o-y basis to Rs 181.43 crore as compared to Rs 83.39 crore for H1 FY2006. EBITDA and net profit have increased to Rs 157.88 crore and Rs 29.83 crore as compared to Rs 67.79 crore and Rs 19.52 crore, respectively.”

“The total income for Q2FY2007 has increased by 114% on y-o-y basis to Rs 95.7 crore as compared to Rs 44.73 crore for Q2FY2006. Net profit has increased to Rs 14.81 crore as compared to Rs 8.58 crore on y-o-y basis. The net profit for Q2FY2007 has decreased to Rs 14.81 crore as compared to Rs 15.02 crore for Q1 FY2007 on q-o-q basis on account of increase in interest burden to Rs 52.28 crore.”

“The EPS for Q2FY2007 has increased to Rs 1.36 (Annualized Rs 5.44 per share) as compared to Rs 0.97 per share for Q2FY2006 on y-o-y basis. The EPS for Q2FY2007 has decreased to Rs 1.36 as compared to Rs 1.38 for Q1 FY2007 on q-o-q basis on account of increase in interest burden.”

“The total assets under management of the company are about Rs 4,200 crore.”

Valuation

“The equity shares of the company are currently industry average P/E of 18. We recommend buy share looking to the robust growth in its earnings.”