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• Turnaround story – exited from unsecured personal finance,
focus back on asset/secured financing
• CV financing focus (67% of book): FY11-13E book CAGR 28%.
Within this, focus on LCVs (less cyclical than MHCVs) and
profitable niche with low-cost model, focus on rural/semi-urban
and micro / small enterprises, nationwide distribution with 90%
of its 226 branches in growing tier II and tier III Indian cities
• Home Equity and Business Finance: secured book with low NPL
- HE: 24% of book, FY10 NPL 1%, FY11-13E book CAGR 19%
- BF: 9% of book, 0% NPL, FY11-13E book CAGR 10%
• Strong earnings growth outlook for FY12 - provisioning for
personal finance done and strong underlying numbers of asset
finance businesses now gets reflected. FY11-13E earnings
CAGR of 76% and ROE of 20% in FY13E
• Market Cap US$445mn, ADV
Promoter 69%, IFC 10%
• Valuation: 1.8x FY13E P/BV and 9.8x FY13E PE
We derive our price target from a residual income model which is the sum of BVPS for FY13E and the present value of
income generated over and above the cost of equity . We assume a discount rate of 13.5% (a risk-free rate of 8%, beta of
1.1x and a risk premium of 5%) and terminal growth of 7.5%.
CLICK HERE TO RETURN TO LIST OF UBS TOP PICK
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
• Turnaround story – exited from unsecured personal finance,
focus back on asset/secured financing
• CV financing focus (67% of book): FY11-13E book CAGR 28%.
Within this, focus on LCVs (less cyclical than MHCVs) and
profitable niche with low-cost model, focus on rural/semi-urban
and micro / small enterprises, nationwide distribution with 90%
of its 226 branches in growing tier II and tier III Indian cities
• Home Equity and Business Finance: secured book with low NPL
- HE: 24% of book, FY10 NPL 1%, FY11-13E book CAGR 19%
- BF: 9% of book, 0% NPL, FY11-13E book CAGR 10%
• Strong earnings growth outlook for FY12 - provisioning for
personal finance done and strong underlying numbers of asset
finance businesses now gets reflected. FY11-13E earnings
CAGR of 76% and ROE of 20% in FY13E
• Market Cap US$445mn, ADV
Promoter 69%, IFC 10%
• Valuation: 1.8x FY13E P/BV and 9.8x FY13E PE
We derive our price target from a residual income model which is the sum of BVPS for FY13E and the present value of
income generated over and above the cost of equity . We assume a discount rate of 13.5% (a risk-free rate of 8%, beta of
1.1x and a risk premium of 5%) and terminal growth of 7.5%.
CLICK HERE TO RETURN TO LIST OF UBS TOP PICK
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