Shriram Transport Finance - Stable performance in a challenging macro environment - Kotak

Shriram Transport Finance Company (STFC) reported 14% earnings growth on the back of moderate but improving loan growth (18% yoy) and stable margins qoq. A strategy to slow down its business momentum in 2012 has helped STFC arrest further deterioration in asset quality even as large banks and NBFCs have recently reported stress in their CV portfolios.

STFC's focus on used CV loans, a counter-cyclical product (up 22% yoy in 3QFY13), will largely drive near-term growth.

We revise our estimates upwards; retain ADD with price target of Rs775.

Source : Equity Bulls

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