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Buy Shriram City Union Finance; target of Rs 2150: Motilal Oswal

Motilal Oswal is bullish on Shriram City Union Finance recommended buy rating on the stock with a target price of Rs 2150 in its research report dated July 30, 2021.

August 06, 2021 / 01:37 PM IST
 
 
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Motilal Oswal's research report on Shriram City Union Finance


Shriram City Union Finance (SCUF) posted PAT of INR2.1b (up 8% YoY; 14% miss) in 1QFY22. PPOP was largely in-line at INR5.7b (flat YoY). While NII stood at INR8.8b (in-line), credit costs stood at INR2.9b (~16% above est.), leading to the PAT miss. 1QFY22 was characterized by a sequentially muted performance in disbursements (due to lockdowns) and ~55bp deterioration in GS3. The company should deliver RoE/RoA of ~14%/4% in FY23E. We maintain our Buy rating, with TP of INR2,150 per share (1.4x FY23E BVPS).



Outlook


Given the visibility around likely loan growth/credit costs, we model in RoA/RoE of 3.6%/14% in FY23E. We maintain our Buy rating, with TP of INR2,150 per share (1.4x FY23E BVPS).

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For all recommendations report, click here


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first published: Aug 6, 2021 01:37 pm

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