Buy Future Capital; target of Rs 173: Firstcall Research

Firstcall Research is bullish on Future Capital and has recommended buy rating on the stock with a target of Rs 173 in its July 7, 2012 research report.

“Future Capital is a provider of financial services across consumer and wholesale businesses, with aspirations to grow into a significant financial conglomerate. Future Capital Holdings Limited was incorporated in 2005 & headquartered in Mumbai, India. It was formerly known as KB In fin Limited and changed its name to Future Capital Holdings Limited in 2006. Future Capital Holdings Limited is a subsidiary of Pantaloon Retail (India) Limited. This non banking financial company is part of Future Group. Future Capital Holdings Limited operates in investment advisory and asset management, and retail financial services businesses in India. It acts as an advisor to investment managers of private equity and real estate funds.”
“The company also manages the Kshitij Venture Capital Fund, a domestic real estate fund that focuses on developing retail malls in India. In addition, the company also advises or manages investments in real estate assets in the retail/ mixed use sector, including convention centers, three or four star hotels, serviced apartments, commercial offices, residential apartments, community centers, and various forms of retail space. Further, it provides financial products and services at present and future malls, stores, and retail outlets, which are owned, controlled or managed by Pantaloon Retail (India) Limited and its subsidiaries.”
“Future Capital Holdings reported a phenomenal rise in consolidated net profit for the quarter ended March 2012. During the quarter, the profit of the company rose 21.43% to Rs 266.84 million from Rs 219.74 million in the same quarter previous year. Net sales for the quarter surged 55.88% to Rs.2258.58 million from Rs.1448.95 million as compared to same quarter last year. Total income surged by 31.30% to Rs 2262.01 million for the quarter ended. The EPS of the company is stood at Rs.4.14 for the quarter ended March 2012.”
“At the current market price of Rs.153.40, the stock is trading at 6.85 x FY13E and 5.37 x FY14E respectively. Earning per share (EPS) of the company for the earnings for FY13E and FY14E is seen at Rs.22.39 and Rs.28.59 respectively. Net Sales and PAT of the company are expected to grow at a CAGR of 42% and 55% over 2011 to 2014E respectively. On the basis of EV/EBITDA, the stock trades at 1.46 x for FY13E and 1.24 x for FY14E. Price to Book Value of the stock is expected to be at 1.01 x and 0.85 x respectively for FY13E and FY14E. 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 173 for medium to long term investment,” says Firstcall Research report. FIIs holding more than 30% in Indian cos Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions. To read the full report click on the attachment

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