SREI Infrastructure Finance Ltd
PRICE : RS.129 RECOMMENDATION : BUY
TARGET PRICE : RS.200 FY10E PE : 7.8X; P/ABV : 1.3X
Stock details
BSE code : 523756
NSE code : SREINTFIN
Market cap (Rs mn) : 14,977
Free float (%) : 75
52-wk Hi/Lo (Rs) : 292/85
Avg. daily volume BSE : 357039
Avg. daily volume NSE : 562900
Shares o/s (mn) : 116.1
Srei Infrastructure Finance (Srei) is well placed to leverage on the robust
capex requirement for infrastructure development. Srei caters to SME
project developers. The NBFC has created a niche for itself in the
infrastructure financing segment. This has helped Srei in capturing a
share of around 30% of the infrastructure equipment financing space.
The sale of the asset financing business to a 50:50 JV with BNP Paribas is
expected to help the company in ramping up its other business. Srei
Infrastructure would largely focus on large ticket equipment financing
projects worth Rs.150 mn and the project financing business. We expect
the business of the NBFC to grow at a CAGR of 46% over FY07-10 to
Rs.111 bn.
We are extremely positive on Srei's business growth prospects. We opine
that this will drive the NBFC's revenue growth, going forward. We have
valued the company on an SoTP methodology to arrive at a fair price
target of Rs.200. At the current price, the stock is trading at around 1.3x
its FY10 ABV of Rs.97. At our price target of Rs.200, the stock offers an
attractive upside of 55%.
We recommend BUY on the stock with a 12- month price target of Rs.200.
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