Q3 FY21 Result Update - Shriram Transport Finance - YES Securities

(Rating: BUY, TP: Rs 1,430, Upside 10.7%)

Strong visibility on growth and credit cost normalization

- Liquidity/ALM pressures have ebbed with SHTF being able to raise significant sums through dollar bonds and term loans in FY21 YTD, and the current liquidity buffer covers next six months of liability repayments and ALM is positive in all shorter buckets.

- We expect earnings to get a fillip from AUM growth acceleration, NIM normalization and reduction in credit cost over FY21-23. Estimate RoA to improve 2.7-2.8% and RoE to 14-15%.

- Despite the sharp run-up in recent months, the valuation is undemanding at 1.2x FY23 P/ABV. Retain BUY and raise price target to Rs1,430.

Shares of SHRIRAM TRANSPORT FINANCE CO.LTD. was last trading in BSE at Rs.1291.65 as compared to the previous close of Rs. 1111.35. The total number of shares traded during the day was 984128 in over 48484 trades.

The stock hit an intraday high of Rs. 1313 and intraday low of 1166.4. The net turnover during the day was Rs. 1247898545.

Source : Equity Bulls

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