Buy Shriram Transport Finance; target of Rs 1307: Edelweiss

Edelweiss is bullish on Shriram Transport Finance has recommended Buy rating on the stock with a target price of Rs 1307 in its research report dated July 31, 2017

August 01, 2017 / 19:06 IST

26 Aug, 2025 12:21

Volume

Todays L/H

Edelweiss' research report on Shriram Transport Finance
Shriram Transport Finance (SHTF) reported strong Q1FY18 performance— PAT at INR4.5bn jumped ~20% YoY, highest in the past 6 quarters. The beat was on account of robust NII traction (up ~15% YoY) driven by margin expansion (up >50bps QoQ to 7.5%) on funding cost benefit and lower interest reversal. Growth showed initial signs of pick up—disbursements rose ~1.5% YoY (had declined over past 2 quarter—translating into sub- 10% AUM growth. However, impact of BS-IV transition and GST implementation will be key monitorables.

Outlook

While uncertainties surrounding merger with the IDFC Group will be a key overhang, valuations of 1.7x FY19E P/ABV for >19% RoE potential leave scope for swap ratio to be in its favour. We maintain ‘BUY/SO’ with TP of INR1,307 (2.2x FY19E P/ABV).

For all recommendations report, 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.