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Last Updated : Jan 31, 2019 05:24 PM IST | Source:

Buy Shriram Transport Finance; target of Rs 1400: Motilal Oswal

Motilal Oswal is bullish on Shriram Transport Finance has recommended buy rating on the stock with a target price of Rs 1400 in its research report dated January 29, 2019.

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Motilal Oswal's research report on Shriram Transport Finance

Shriram Transport Finance (SHTF) reported 3QFY19 PAT at INR6.4b, in line with of our estimate of INR6.2b (17% YoY growth). However, largely flattish AUM QoQ surprised negatively. Liquidity crunch in the system impacted disbursements (down 32% QoQ and 30% YoY). Company increased securitization book during the quarter to INR193b v/s INR166b a quarter ago. AUM grew 15% YoY and was flat QoQ at INR1.04t. Within AUM, share of new commercial vehicles (CVs) declined 5% QoQ, while used CVs and others were largely flat QoQ.


We view SHTF to be at the cusp of an upcycle, after a tough business cycle and stringent regulation. Bulk of the loans generated is eligible for priority-sector lending, and hence, the company should be able to generate liquidity through sell-downs. Reiterate Buy with a target price of INR1,400 (1.6x December 2020 book value).

For all recommendations report, click here

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First Published on Jan 31, 2019 05:24 pm
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