Silky Jain has stated that PFS has reported strong performance in Q1FY15 with growth across all parameters. Management aims to double its balance sheet in the next 12-18 months. The company has huge sanctions pipeline (Rs 5000 cr of which management is confident of sanctions worth Rs 4000 in FY15E) which is likely to drive disbursement growth going forward. Driven by strong growth in loan book, PFS is all set to deliver strong performance in profitability. Moreover, exit from strategic equity investments is likely to further boost profitability.
“PTC’s continued focus on improving core performance will further lead to a re-rating of the stock from current levels. At CMP, PFS trades at 1.17x and 0.99x its FY15E and FY16E BV and 7.43x and 6.46x its FY15E and FY16E EPS respectively. We believe that the stock can generate return of 20-25% in the near term and therefore we recommend BUY on the stock at current levels.”
Sharekhan has added PTC India Financial Service to its Model Portfolio of Top Stock Picks for August 2014. It is stated:
“PFS has delivered strong results for Q1FY2015 led by healthy margins which, in turn, have helped it to maintain superior return ratios. Going ahead, the cost of borrowing may moderate led by higher borrowings from bonds/ECBs. The company also plans to exit one of its equity investments in FY2015 which will boost the profit (it exited three to four investments in the past with an average return of 25%). With close to doubling of its advances book over the next two years, we expect PFS’ earnings to grow at 44% CAGR over FY2014-16. We have a Buy rating and price target of Rs44 on the stock”