Prabhudas Lilladher is bullish on Shriram Transport Finance has recommended buy rating on the stock with a target price of Rs 1568 in its research report dated April 22, 2019.
Prabhudas Lilladher's research report on Shriram Transport Finance
We evaluated likely impact of a merger between Shriram Transport Finance (SHTF) and Shriram City Union Finance (SCUF) and believe that it will unlock value for shareholders. Merger of SHTF+SCUF would see holding company i.e. Shriram Capital getting listed as a full-fledged financial services firm spread across NBFC, housing and insurance arm and pave way for exit of PE players, thus removing overhang on valuations. Merger will drive synergy benefits given a loan book of ~Rs1326bn, lower concentration risks, diversified liability profile, increase in Tier I capital and can also improve credit ratings.
We reiterate positive stance on the used CV financing business of SHTF at 1.4x PABV FY21E and believe SCUF merger can improve financial metrics. Retain BUY.
For all recommendations report, click here
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