Buy Shriram Transport; target Rs 767: Firstcall Research

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Buy Shriram Transport; target Rs 767: Firstcall Research

Firstcall Research is bullish on Shriram Transport Finance (STFC) and has recommended buy rating on the stock with a target of Rs 767 in its September 06, 2011 research report.

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Firstcall Research is bullish on Shriram Transport Finance (STFC) and has recommended buy rating on the stock with a target of Rs 767 in its September 06, 2011 research report.

"Shriram Transport Finance Co. Ltd (STFC) is a flagship company of Shriram Group, a prominent player in commercial vehicle financing business. During the quarter ended, the robust growth of Net Profit is increased by 20.20% Rs. 3473 million. Company has allotted 37,600 equity shares to 08 employees at the Allotment Committees Meeting held on September 02, 2011. STFC is India's largest asset financing Non Banking Finance Company having 25% market share in preowned and 8% share in new truck financing. Net Sales and PAT of the company are expected to grow at a CAGR of 15% and 27% over 2010 to 2013E respectively."

"Shriram Transport Finance Company has posted a rise of profit on standalone basis for the quarter ended June 30, 2011 During the quarter, profit has surged of Rs 3473.00 million for the quarter ended June 30, 2011 as compared to Rs. 2889.40 million for the quarter ended June 30, 2010 rise of 20.20%. Net sales are increased by 12.95% to Rs. million from Rs. 13932.20 million as compared to same quarter last year. Total income has increased to Rs 14654.30 million for the quarter ended June 30, 2011, from Rs 12869.30 million for the quarter ended June 30, 2010 representing a rise of 13.87%. The EPS of the company is stood at Rs.15.35 per share for the quarter ended June 30, 2011."

"At the current market price of Rs.667.00, the stock is trading at 10.01 x FY12E and 8.46 x FY13E respectively. Earning per share (EPS) of the company for the earnings for FY12E and FY13E is seen at Rs.66.69 and Rs.78.88 respectively. Net Sales and PAT of the company are expected to grow at a CAGR of 15% and 27% over 2010 to 2013E respectively. On the basis of EV/EBITDA, the stock trades at 3.24 x for FY12E and 2.89 x for FY13E. Price to Book Value of the stock is expected to be at 2.36 x and 1.84 x respectively for FY12E and FY13E. We expect that the company will keep its growth story in the coming quarters also. We recommend 'BUY' in this particular scrip with a target price of Rs 767 for Medium to Long term investment," says Firstcall research report.

Public holding more than 90% in Indian cos

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To read the full report click on the attachment