IDFC Ltd (IDFC IN, mcap US$3.9bn, 3-mth ADV $18.0mn, BUY) - Ambit

An influential board, a diversified shareholding pattern and experience in financial services sector are aspects that go in favour of IDFC's candidature.

The stock is trading at 1.5x one-year forward P/B, which makes the risk-reward favourable for investors given that the company's earnings growth is highly geared to the recent positive developments in the power sector (such as coal price pooling, SEB debt restructuring and PPA revisions). Moreover, an adequate provisioning cushion to absorb even an 8x increase in NPAs means that the downside risk to earnings is limited.

We are BUYers at a target price at Rs161/share.

Source : Equity Bulls

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