 Buy ILandFS Investment; target of Rs 57: Sushil FinancePublished on Mon, May 09, 2011 at 16:08 | Source : Moneycontrol.com Updated at Mon, May 09, 2011 at 16:14 2215 Investors following ILandFS. Share this News with them.
Sushil Finance is bullish on ILandFS Investment Managers and has recommended buy rating on the stock with a target of Rs 57 in its May 5, 2011 research report. "IL&FS Investment Managers Ltd. (IIML) has declared results for the quarter ended March'11 which was in line with our expectations. On sequential basis, Revenues de-grew by ~6% to Rs.517 mn whereas PAT registered a growth of 11% to Rs.182 million." "Revenues de-grew by ~6% on sequential basis from Rs.551 mn in Q3FY11 to Rs.517 mn in Q4FY11 which was mainly because of some exits from the Leverage India fund (LIF). However on account of Saffron acquisition, revenues for the full year witnessed a growth of 12% from Rs.1698 mn in FY10 to Rs.1900 mn in FY11. Company expects complete exit from LIF in FY12, the carry of which would majorly flow in FY13. Operating profit stood almost flat at Rs.295 mn in Q4FY11, whereas margins improved by 420 bps from 52.8% in Q3FY11 to 57.0% in Q4FY11. The margin improvement was mainly on back of lower employee cost. Operating profit for FY11 stood at Rs.1070 mn v/s Rs.1018 mn, up by ~5% whereas its margins dipped by 370 bps to 56.3%." "Net Profit grew by 11% QoQ from Rs.164 mn to Rs.182 mn in Q4FY11 which was mainly on back of higher other income & lower depreciation cost. Margins improved by 550 bps from 29.8% to 35.3%. Saffron has very low net margins (i.e.~10-12%) which has resulted into significant decline in consolidated NPM by ~720 bps from 43.5% in FY10 to 36.3% in FY11. Net profit for FY11 witnessed a de-growth of ~7% from Rs.738 mn to Rs.690 mn in FY11. EPS for Q4FY11 & FY11 stood at Rs.0.9 and Rs.3.4 respectively." "Increasing focus on growth sectors coupled with its ability to pick value investment has resulted into strong investment track record for the Company over the last couple of years. Strong parental support, high management credibility coupled with its sound business model would enable the Company to maintain higher growth in future. Value unlocking by the way of carry profit from FY13 onwards is likely to be the major growth catalyst for the Company going ahead. We have valued the Company based on SOTP of its assured annuity income (MCap/AUM) and NPV of its carry profits. At the CMP of Rs. 36, the stock is attractively trading at 0.040x MCap/AUM (FY13E). The stock has corrected sharply in last couple of months resulting into high dividend yield of ~4.2%. Hence, considering all the above investment arguments, we maintain our 'BUY' rating on the stock with a price target of Rs 57," says Sushil Finance research report. What stocks does Aberdeen hold? Disclaimer: The views and investment tips expressed by investment experts on moneycontrol.com are their own, and not that of the website or its management.Moneycontrol.com advises users to check with certified experts before taking any investment decisions. To read the full report click on the attachment Attachments : IL&FS_Sushil_090511.pdf
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