Religare's research report on Shriram TransSHTF’s Q4FY16 PAT at Rs 1.4bn came in sharply below our/consensus estimates due to a spike in provisions. Asset quality was a miss as GNPAs spiraled up to 6.2% (Q3: 4.3%) due to the CE business merger and migration to 150dpd NPA recognition norms. AUM growth however was healthy at 23% YoY led by a 21%/62% growth in pre-owned/new CVs.We cut FY17/FY18 EPS by 11%/12% in light of further stress on asset quality. BUY; Mar’17 TP Rs 1,150.We cut our FY17/FY18 estimates by 11-12% given the pain on asset quality post complying with the NPA transitioning norms. However, we reiterate BUY on the stock with a Mar’17 TP of Rs 1,150 as we believe SHTF remains the best bet on a CV recovery cycle. For all recommendations, click here 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.
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