Motilal Oswal has maintaiend buy rating on Indiabulls Finance with target price of Rs 943, having upside potential of 26%, in report dated on November 23, 2007.
"Indiabulls has created a large scaleable consumer finance business over the last two years. Its loan book has gone up from Rs31billion (incl securitized) as of March 2007 to Rs56 billion as of September 2007. We expect higher momentum going forward and estimate a loan book of Rs190 billion in FY09 and Rs295 billion in FY10. Volume growth, leverage benefits and lower provisions would be key catalysts for earnings, even as yields and margins decline due to shift in company's focus towards big ticket secured loans.We expect a 50% CAGR in PAT from its core businesses, over FY07-10E. The stock trades at 18x FY09E EPS and 13x FY10E EPS. Our SOTP-based price target of Rs943 indicates an upside of 26%. Potential upside from new businesses can be substantial. We initiate coverage with a Buy" says Motilal Oswal report.
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