Sharekhan recommended hold rating on PTC India Financial Services with a target price of Rs 21 in its research report dated August 30, 2018.
Sharekhan's research report on PTC India Financial Services
PTC India Financial Services (PFS) posted mixed performance for Q1FY2019. Net interest income (NII) declined by 27.8% y-o-y to Rs. 98.6 crore, mainly impacted by margin contraction, but witnessed positive performance on the growth side. During the quarter, net interest margin (NIM) declined by 28 BPS q-o-q and 192 BPS y-o-y to 2.85%, while interest spread declined by 159 BPS y-o-y to 1.16%. Provisions for the quarter jumped by 20.2% y-o-y to Rs. 17.1 crore. Consequently, net profit for the quarter declined by 22.7% y-o-y to Rs. 55.9 crore.
The stock currently trades at low valuation of 0.4x its FY2020E book value, reflecting concerns over asset quality going ahead as PFS has a considerable exposure to the power segment. We maintain our Hold rating on the stock with a price target (PT) of Rs. 21.
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