Buy Cholamandalam Investment and Finance Ltd For Target Rs.317Another stable quarter
Cholamandalam Investment and Finance (CIFC) reported results in line with expectations with strong growth in NII driven by higher disbursements and benefit of capital raising done in the quarter. Improving product mix towards higher yielding segment and presence in LCV segments has helped the company to maintain growth momentum. Despite addition in branches and higher employee base cost to income ratio of the company stood within targeted levels. Provisions were on the higher side which was due to provision for loan loss asset during the quarter. PAT stood at Rs 86 cr up 59% YoY and 5.3% QoQ in Q4FY13. For FY13, PAT stood at Rs 307 cr up 77.7%.
We are impressed with the strategy of Management to maintain growth without compromising on the asset quality. In order to maintain asset quality company has not been focusing on increasing the gold loan portfolio considering the overall concerns in the sector. Even though the CV industry is not doing good CIFC is a safe player as its focus is more towards the LCV segment which has not yet seen any significant signs of stress and is performing satisfactorily. Moreover, company also focuses on high yielding and growing segment of used CVs and tractor financing. This will ensure that the company continues to maintain its growth momentum. Improving productivity of branches will lead to an improvement in cost to income ratio. We believe that margins will continue to remain strong with easing interest rate cycle as most of the loans of the company are at fixed rate.
The above initiatives with a revamped business model will lead to a sustainable and profitable growth in CIFC’s business and expect PAT to grow at a CAGR of 28.7% over FY13-FY15E. We expect CIFC to report an improvement in its RoE from 18.3% in FY13 to 20.2% in FY15E and RoA (post tax) to improve from 1.9% in FY12 to 2% in FY15E. At CMP the stock is trading at 1.69x FY14E and 1.43x FY15E ABV and 9.65x FY14E and 7.58x FY15E EPS respectively. Based on our estimated BV of Rs.159 per share for FY14E and P/ABV target multiple of 2.0x we arrive at a target price of Rs.317. We continue to maintain our positive
outlook on the stock and recommend investors to HOLD the stock for a further upside of 18% from current levels.
* CIFC reported strong growth in AUM at 41.1% YoY and 10.9% QoQ to Rs 18,998 cr in Q4FY13.
* Disbursements growth remained robust at 32.6% YoY and 22.3% QoQ to Rs 3,808 cr during Q4FY13.
* CIFC opened 12 branches in Q4FY13 taking the total branch network to 518 branches in line with expectations and added 1,416 employees during the quarter. Despite this the cost to income ratio was broadly stable during the quarter at 48.8% reflecting improving productivity.
* Gross NPA stood at 1.0% as compared to 1.17% in Q3FY13. Net NPA stood at 0.2% vs 0.63% QoQ.
Buy Persistent Systems Ltd For Target Rs.586.00Persistent Systems Ltd, established in 1990 is a global company specializing in software product and technology innovation.
* During the third quarter ended the robust growth in the Net Profit of the company and it is rose by 25.88% to Rs. 518.85 mn.
* Persistent Systems recommended a final dividend of Rs. 3 per share for FY 2012-13.
* Persistent Systems has entered into a strategic agreement with HP to license its
* HP Client Automation (HPCA) software. Persistent Systems Limited launches Persistent Ventures as a division.
* Persistent Systems launches PaxPharma, Compliance-based Design to Print Automation for Pharmaceutical Industry.
* Persistent Systems recognized by IDG’s Computerworld Honors Program as a “2013 Computerworld Honors Laureate” in the Emerging Technology category.
* MUHS, UoP, UoM, Dr. BAMU and Persistent Systems announce a National Strategic Initiative to promote Inclusive Innovations
in India.
* Net Sales and PAT of the company are expected to grow at a CAGR of 22% and 21% over 2012 to 2015E respectively.
Investment Highlights
Results updates- Q4 FY13,
The company’s net profit jumps to Rs.518.85 million against Rs.412.17 million in the corresponding quarter ending of previous year, an increase of 25.88%. Revenue for the quarter increase 23.40% to Rs.3339.59 million from Rs.2706.24 million, when compared with the prior year period. Reported earnings per share of the company stood at Rs.12.97 a share during the quarter, registering 25.88% increase over previous year period. Profit before interest, depreciation and tax is Rs.933.15 millions as against Rs.738.49 millions in the corresponding period of the previous year.
Outlook and Conclusion
* At the current market price of Rs.540.00, the stock P/E ratio is at 9.85 x FY14E and 8.69 x FY15E respectively.
* Earning per share (EPS) of the company for the earnings for FY14E and FY15E is seen at Rs.54.84 and Rs.62.12 respectively.
* Net Sales and PAT of the company are expected to grow at a CAGR of 22% and 21% over 2012 to 2015E respectively.
* On the basis of EV/EBITDA, the stock trades at 5.28 x for FY14E and 4.59 x for FY15E.
* Price to Book Value of the stock is expected to be at 1.75 x and 1.45 x respectively for FY14E and FY15E.
* We expect that the company surplus scenario is likely to continue for the next years, will keep its growth story in the coming quarters also. We recommend ‘BUY’ in this particular scrip with a target price of Rs.586.00 for Medium to Long term investment.
Buy Sanwaria Agro Oils Limited For Target Rs.32.00 Sanwaria Agro Oils Limited engages in the extraction, processing, refining, and trading of soya seed and soya refined oil in India.
* The company’s net sales registered an 11.25% increase and stood at a record Rs. 3687.54 million from Rs. 3314.58 million
over the corresponding quarter last year.
* The company’s net profit registered a 109.63% increase and stood at a record Rs. 85.53 million from Rs. 40.80 million over
the corresponding quarter last year.
* Sanwaria Agro Oils has been ranked at 454th on the basis of Market Cap and also ranked at 472nd on the basis of Net Revenue
by Financial Express Magazine under FE 500 India's Finest Companies.
* Sanwaria Agro Oils Ltd is registered as ISO 14001:2004 Company for Environmental Management System & ISO 22000:2005
Company for Food Safety Management with HACCP as certified by Care Certification Private Limited.
* Net Sales and PAT of the company are expected to grow at a CAGR of 9% and 16% over 2011 to 2014E respectively.
Investment Highlights
Results updates- Q3 FY13,
Sanwaria Agro Oils Ltd has treaded to its own manufacturing of Jar for packaging of Soya refined Oil, reported its financial results for the quarter ended 31 DEC, 2012. The Third quarters witness a healthy increase in overall sales as well as profitability of the company.
The company’s net profit jumps to Rs.85.53 million against Rs.40.80 million in the corresponding quarter ending of previous year, an increase of 109.63%. Revenue for the quarter increase 11.25% to Rs.3687.54 million from Rs.3314.58 million, when compared with the prior year period. Reported earnings per share of the company stood at Rs 0.25 a share during the quarter, registering 109.63% increase over previous year period. Profit before interest, depreciation and tax is Rs.211.58 millions as against Rs.95.47 millions in the corresponding period of the previous year.
Outlook and Conclusion
* At the current market price of Rs.28.50, the stock P/E ratio is at 15.97 x FY13E and 11.84 x FY14E respectively.
* Earning per share (EPS) of the company for the earnings for FY13E and FY14E is seen at Rs.1.78 and Rs.2.41 respectively.
* Net Sales and PAT of the company are expected to grow at a CAGR of 9% and 16% over 2011 to 2014E respectively.
* On the basis of EV/EBITDA, the stock trades at 12.43 x for FY13E and 9.84 x for FY14E.
* Price to Book Value of the stock is expected to be at 3.34 x and 2.60 x respectively for FY13E and FY14E.
* We expect that the company surplus scenario is likely to continue for the next years, will keep its growth story in the coming quarters also. We recommend ‘BUY’ in this particular scrip with a target price of Rs.32.00 for Medium to Long term investment.
ALUMINIUM 31-May exp
pivot point
| provice closing 100.55 | s3 95.88 | s2 96.92 | s1 98.73 |
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