Motilal Oswal has given Buy recommendation for Shriram City Union Finance recommended buy rating on the stock with a target price of Rs 2150 in its research with a target price of Rs. 2150 in its research report issued on Jul 30, 2021
Motilal Oswal’s research report on Shriram City Union Finance
Shriram City Union Finance (SCUF) posted PAT of INR2.1b (up 8% YoY; 14% miss) in 1QFY22. PPOP was largely in-line at INR5.7b (flat YoY). While NII stood at INR8.8b (in-line), credit costs stood at INR2.9b (~16% above est.), leading to the PAT miss. 1QFY22 was characterized by a sequentially muted performance in disbursements (due to lockdowns) and ~55bp deterioration in GS3. The company should deliver RoE/RoA of ~14%/4% in FY23E. We maintain our Buy rating, with TP of INR2,150 per share (1.4x FY23E BVPS).
Given the visibility around likely loan growth/credit costs, we model in RoA/RoE of 3.6%/14% in FY23E. We maintain our Buy rating, with TP of INR2,150 per share (1.4x FY23E BVPS).