Axis Direct's research report onPTC India Financial Services
PTC India Finance (PFS) reported PAT growth of 123% YoY at Rs 109 cr led by profit on sale of investments (Rs.131 cr). Loan book grew by 43% YoY to Rs 12,342 cr, management maintained their guidance of 30-40% loan book growth for next 2-3 years led by renewable energy.
OutlookPFS’s focus on renewable energy to drive loan book growth along with stable asset quality. Thus it should enable company to deliver 2.6‐2.7% RoA and 16‐17% RoE on ongoing basis. We expect PFS’s business to grow rapidly over next couple of years with loan book growth of 28% CAGR (FY17-19E) and PAT earnings growth of 24% CAGR (FY17-19E). At CMP the stock trades at 1.1x FY18E P/BV. We value PFS at FY18E P/BV multiple of 1.1x to arrive at target price of Rs.52 and continue to have BUY rating.
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