Sundaram Finance Q3FY17: Why are Firstcall overweight for medium to long term investment?

Firstcall India Equity | May 18, 2016, midnight


SYNOPSIS

  • Sundaram Finance Ltd incorporated in 1954 has grown today into one of the most trusted financial services groups in India.
  • Revenue for the quarter stood at Rs. 5981.27 million as compared to Rs. 5909.08 million, when compared with the prior year period.
  • During Q3 FY17, EBIDTA is Rs. 5092.90 million as against Rs. 4928.13 million in the corresponding period of the previous year.
  • During Q3 FY17, PBT stood at Rs. 2010.81 million vs Rs. 1472.37 million in Q3 FY16, up by 36.57%.
  • During Q3 FY17, the company’s net profit jumps to Rs. 1382.43 million as against Rs. 1021.82 million in Q3 FY16, up by 35.29%.
  • EPS of the company stood at Rs. 12.44 during the quarter, as against Rs. 9.20 per share over previous year period
  • During 9M FY17, Net Sales increased to Rs. 17476.44 million from Rs. 17301.19 million in 9M FY16.
  • During 9M FY17, PAT was at Rs. 3561.01 million as compared to Rs. 3551.68 million in 9M FY16.
  • PAT of the company is expected to grow at a CAGR of 6% over 2015 to 2018E.


OUTLOOK AND CONCLUSION

  • At the current market price of Rs. 1294.30, the stock P/E ratio is at 29.00 x FY17E and 25.84 X FY18E respectively.
  • Earning per share (EPS) of the company for the earnings for FY17E and FY18E is seen at Rs. 44.62 and Rs. 50.10 respectively.
  • PAT of the company is expected to grow at a CAGR of 6% over 2015 to 2018E.
  • On the basis of EV/EBITDA, the stock trades at 10.75 x for FY17E and 10.25 x for FY18E.
  • Price to Book Value of the stock is expected to be at 3.78 X and 3.29 x for FY17E and FY18E respectively.
  • Hence, we say that, we are Overweight in this particular scrip for Medium to Long term investment.

 

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