Buy Future Capital; target of Rs 173: Firstcall Research

Firstcall Research is bullish on Future Capital Holdings and has recommended buy rating on the stock with a target of Rs 173 in its September 22, 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.”

“Future Capital is a provider of financial services across consumer and wholesale businesses, with aspirations to grow into a significant financial conglomerate in India, reported its financial results for the quarter ended 30th June, 2012. The first quarter witness a healthy increase in overall sales as well as profitability on account of acquired over 37000 customers in its Consumer Durables and Two Wheeler businesses. The company’s net profit jumps to Rs.260.09 million against Rs.218.60 million in the corresponding quarter ending of previous year, an increase of 18.98%. Revenue for the quarter rose 26.99% to Rs.2069.84 million from Rs.1629.98 million, when compared with the prior year period. Reported earnings per share of the company stood at Rs.4.03 a share during the quarter, registering 19.53% increase over previous year period. Profit before interest, depreciation and tax is Rs.1504.09 millions as against Rs.1137.50 millions in the corresponding period of the previous year.”

"During the quarter total expenditure rose by 18 per cent mainly on account of increase in Loan Origination Costs along with consideration of depreciation. Total expenditure in Q1 FY13 was at Rs.580.32 million as against Rs.493.75 million in Q1 FY 12. Loan Origination Costs Rs.59.61 millions against Rs.45.02 millions in the corresponding period of the previous year. Other Expenditure were at Rs.191.79 million and Employee Benefit Expenses are Rs.321.22 million in Q1 FY13 are the primarily attributable to growth of expenditure. Future Capital Holdings is currently part of the kishore Biyani-led Future Group. The first quarter witness a healthy increase in overall sales as well as profitability on account of acquired over 37000 customers in its Consumer Durables and Two Wheeler businesses. We expect that the company surplus scenario is likely to continue for the next three years, 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,” Firstcall Research report.

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