This is the largest NBFC into the rural and semi-urban space with 550 branches and assets under management of Rs 14,000 crore. This is a subsidiary of Mahindra & Mahindra with 56% stake held by Mahindra & Mahindra while the total promoter stake is close to about 58%.
For FY11 they have posted an EPS of Rs 48. The company has very robust business profile in place because they are financing all type of cars, utility vehicles, tractor trucks, tractors and even the agricultural other implements and other things. So, going forward the company does not have any problem.
The company to post an EPS of close to about Rs 60 for FY12. If you take the price to book maybe on FY12 earnings they will be having a book value close to about Rs 330.
The EPS to be close to about Rs 62-63 the share is ruling at a PE multiple of 10 and the price to book it is 2. If you take these into consideration I think share is quite cheap available if you compare this with Bajaj Finance or maybe with Shriram Transport.
Lately we have seen the renewed interest coming back into these NBFCs. Apart from that the company has the highest PAT margin into the industry which is at 24% plus.
Taking all this into consideration, the promoters background, the company background, the financials, the share again looks quite good. Maybe in about next six months one can expect a price of Rs 800 with very limited downside risk from hereon.
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