Automall to help in consolidating Shriram’s positioning- Shriram Transport Finance, Deutsche bank,

Please Share:: India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��


Shriram Transport Finance Buy
Automall to help in consolidating Shriram’s positioning


Shriram Transport inaugurates Automall: We attended the inauguration
of the first Shriram Automall near Chennai recently. Automall is a wholly
owned subsidiary of Shriram Transport Finance ( STFC ). STFC plans to open
three more Automalls by end-March 2011 and then add 50-60 automalls
over the next 2-3 years. Automall will start contributing to fee income soon,
but will achieve scale only by FY13. Our estimates already factor in fee income from automalls.
To provide diversified services: Automalls will conduct auctions for used
vehicles - repossessed as well as refurbished vehicles, provide refurbishing
facilities, touch screen kiosks, finance and insurance services, etc. At a later
date, it will also start auctioning the vehicles repossessed by other financiers.
To help STFC consolidate its position: While this initiative would generate
fee income for STFC, more importantly it should enable them to further
consolidate their position in the CV financing segment. It will help them in
gauging the various CV models in demand, in improving their valuation expertise as auctions would lead to better price discovery and create another
formidable entry barrier for new players entering the CV financing segment.
We maintain Buy on Shriram Transport Finance with a target price of
INR895.