Dilip Bhat`s view on IDFC

Dilip Bhat, Joint MD, Prabhudas Lilladher shares his view on IDFC. It can run up by 10-15% but it doesn’t have any great RoE’s to support for any sustainable rise beyond that. One should still play for 10-15% that is what it appears at the moment.

Bhat told CNBC-TV18, “SKS Microfinance, at best one can just have a short term kind of play in this because the atmosphere in which we are at the moment, the kind of beating the economy is taking and the conditions of the people, it will be very difficult to imagine that it will be free of any political interferences. So, that will continue to haunt the stock for sometime to come.”
He further added, “Unless and until we are in a secular good economic growth, I think these kinds of stocks in this kind of economic situation at best can be played only on a short term basis not on a long term basis.”
“The way IDFC have shaped up on the NPAs, the way the disbursements have happened at the moment and the way the guidance has been given which I understand is about 15-20% growth, it has been a little below this range for quite sometime. So, may be based on what I have heard today- the management talk on various channels, it is very apparent that may be the worst is over and possibly we can look for some kind of better times. The only problem which I see in this particular stock is, may be it can run up by 10-15% but it doesn’t have any great RoE’s to support for any sustainable rise beyond that. One should still play for 10-15% that is what it appears at the moment.”