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Shriram Transport Finance - Multibagger

Monday, October 29, 2007

Shriram Transport Finance (PN Vijay, Investment Advisor) Reco Price Rs. 248.00

The company has reported an EPS of 18.32 for the whole year 2007-08 based on annualized profits of the first half year. This works out to a P/E ratio of 12.8. We recommend this share with a target price of Rs 360 on a one-year horizon.

Company:

Shriram Transport Finance is a Chennai based finance company which has been in existence for over 27 years. It is the leader in financing of pre-owned cars in the country. It commands a huge market share of over 25% with asset size of Rs120bn. It has got a very good expertise in a highly profitable area where knowledge of the market is a key determinant for success.

Financials:

STFL has reported excellent numbers for the second quarter of 2007-08. It’s profits more than doubled to Rs 96 crores on revenue base of Rs 570 crores. The company is also having expansion plans for which it will approach global capital markets.

Triggers:

Unlocking of investments in insurance venture.

Valuation:

The company has reported an EPS of 18.32 for the whole year 2007-08 based on annualized profits of the first half year. This works out to a P/E ratio of 12.8. This is extremely attractive considering the growth in turnover and profits, strong market share and unlocking of opportunities which are available.

We recommend this share with a target price of Rs 360 on a one-year horizon

Disclaimer: The company's shares are a part of our proprietary portfolios and also in many of the portfolios managed by us.

Posted by FR at 9:59 AM  

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IMPORTANT DISCLAIMER

Investment in equity shares has its own risks. Sincere efforts have been made to present the right investment perspective.The information contained herein is based on analysis and up on sources that we consider reliable. I, however, do not vouch for the accuracy or the completeness thereof. This material is for personal information and I am not responsible for any loss incurred based upon it.& take no responsibility whatsoever for any financial profits or loss which may arise from the recommendations given in this blog.