Shriram City Union can move to about Rs 715: Tulsian

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Shriram City Union can move to about Rs 715: Tulsian

Shriram City Union Finance can move to about Rs 715 in next six-eight months time, says SP Tulsian, sptulsian.com.

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Excerpts from Bazaar on CNBC-TV18 Watch the full show » ALSO READ See previous views by SP Tulsian See what other Experts & Brokerages are saying about Shriram City See messages about Shriram City

Shriram City Union Finance can move to about Rs 715 in next six-eight months time, says SP Tulsian, sptulsian.com.

Tulsian told CNBC-TV18, "Shriram City Union Finance is an NBFC and if you see the recent last one month even the results having posted by the NBFCs whether you take the case of Bajaj Finance or maybe other NBFCs, the results have been quite good, there has been positive perception for all these NBFCs companies."

He further added, "If you take the larger ones like Bajaj Finance, Shriram Transport Finance, I think they have all been ruling at a price to book of 2.3-2.5 or for that matter even Mahindra & Mahindra Finance. But Shriram City Union Finance gets placed in the midsize category of NBFCs with a loan book of close to about Rs 7,000 crore."

"If you see the financial performance for FY11, the company posted total income of close to about Rs 1,300 crore and they posted a PAT of close to about Rs 49 crore, which translated into an EPS of close to about Rs 48.50. If I go by the financial performance for FY12, considering a growth of at least 14-15%, I think company should be able to post an EPS of Rs 56 that translates into a PE multiple of less than 10 or close to about 10 and if I go by the price to book which should rule at - if I take the book value as at 31 March, 2012 the current year expiry, by taking that price to book is ruling at 1.9."

"If you see the shareholding pattern also, promoters are holding about 53-54% stake, six investors, the larger ones are holding about 41% stake, so that shows the confidence in fact these kind of price movements we have been seeing in Shriram Transports also in last one year. So I think that company can move towards the upper range and the share can move to about Rs 715 in next six-eight months time considering its fundamentals."

Disclosure: I have no personal holding in the above stock.