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You are here : IndiaNotes >> Research & Analysis >> Companies >> PTC India Financial Services Ltd. >> Research

PTC India Financial Services: Attractive valuations; Buy for a target of Rs75

ShareTipsInfo | 10 Nov, 2014  | Follow Author | Add to my Favourites 
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Company Overview:


PTC India Financial Services Ltd (PFS) is promoted by PTC India Ltd (PTC) as a special purpose investment vehicle to provide total financial services to the entities in energy value chain, which inter-alia includes investing in equity and/or extending debt to power projects in generation, transmission, distribution; fuel sources, fuel related infrastructure like gas pipelines, LNG terminals, ports, equipment manufacturers and EPC contractors etc. PFS also provides non-fund based financial services adding value to green field and brown field projects at various stages of growth and development.


Equity Investment:


PFS is one of the promoters of India's first power exchange viz. Indian Energy Exchange and currently holds approx 5% equity after divestment of 21% stake in exchange. The exchange holds more than 80% market share.


Performance Highlights:


PFS witnessed an acceleration in disbursement growth during FY 14 (Rs 30.7bn up 130% YoY) as many of the sanctioned projects achived developmental milestones. Given huge sanction in plance, company is fairly confident of disbursing a higher amount in the cured year. With sanceion pipline likely to increase as overall power/infra investments impove, the disbursement growth is estimated to remain strong in the longer term also. It si estimated its loan assets to increase to Rs150 bn by FY17(nearly 3x the current size) repreesting a robust CACR of 44%.


Valuation & Outlook:
Estimated book value, resulting in a price target of Rs75. Currently, the stock is trading at 12.5x and EPS of 4.1. And now industry P/E is around 24.6, If take discounted p/e with 20 in coming quarter then we found the fair value we have 75/80 FY2017E book value, which is reasonable considering the company’s strong growth prospects. We maintain Buy rating on the stock.


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Disclaimer: The author has taken due care and caution to compile and analyse the data. The opinions expressed above are only the views of the author, and not a recommendation to buy or sell. Neither the author nor IndiaNotes.com accept any liability whatsoever arising from the use of any of the above contents.

 




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