PTC India Financial Services Ltd. share price target

ICICI Securities Ltd | Retail Equity Research The management of PTC India Financial Services has informed the exchange regarding successful divestment of its entire stake in Indian Energy Exchange (IEX) for a consideration of | 132.54 crore. Prior to the deal, investment in IEX was at | 1.52 crore, leading to a profit of ~| 131 crore. However, the management is expected to utilise a proportion of gains as higher provisions. Consequently, we have revised our FY17E PAT estimates by 28% factoring in one-time gains at | 404 crore. Keeping...

PTC India Finance: PTC India Finance (PFS) reported PAT growth of 20% YoY at Rs 83 cr led by strong growth of 26% YoY in interest income

ICICI Securities Ltd | Retail Equity Research Asset quality deteriorated with GNPA at | 459 crore vs. | 403.9 crore in Q2FY17. GNPA ratio, therefore, surged to 4.78 from 4.29% QoQ PAT came in at | 83.2 crore, above our estimate of | 78 crore, led by a better-than-expected topline. NII came in above our estimate at | 129.9 crore but declined QoQ from | 141 crore due to higher NPA NIM fell to 5.44% from 6.15%, owing to interest income reversal. Advances grew 23% YoY and 2% QoQ to | 9613 crore, depicting...

PTC India Finance (PFS) reported PAT growth of 25% QoQ at Rs 85 cr as one loan account with an exposure of Rs.125 crores, earlier identified as nonperforming, has been upgraded as Standard Asset which resulted into an interest income of Rs.23.83 cr.

Strong asset quality with reduction in NNPA PFS is dealing with all the NPAs in the stress accounts, in fact is in the process of churning them out. The amount of gross NPA for Q2 FY17 stood at ` 403.86 crores as against ` 528.89 crores during the previous quarter of FY17. The % of gross & Net NPA to advances decreased to 4.29% & 2.86% respectively during Q2 as against 5.83% & 4.53% in the previous quarter. During Q1 FY17, PFS has been specified as a "Financial Institution" under the SARFAESI Act,2002. This would enable PFS to take effective measures related to recovery of dues/loan amount & restoration of economic value of stressed assets....

ICICI Securities Ltd | Retail Equity Research Post higher slippages in the previous quarter, asset quality remained resilient led by the recovery of an account with exposure of | 125 crore. Consequently, GNPA declined from | 528.9 crore in Q1FY17 to | 403.9 crore. GNPA ratio, therefore, improved 1.54% QoQ at 4.29% PAT came in at | 84.9 crore, above our estimate of | 74.3 crore, led by better-than-expected NII at | 141.5 crore, partly offset by higher provision at | 33.6 crore (I-direct estimate: | 4.7 crore)...

PTC India Limited recently participated in a conference call with Dr Pawan Singh, Director (Finance) & CFO of PTC India Financial Services (PFS). The company’s loan (assets) growth is expected to continue with renewable segment as the major contributor. On the liability side, a shift to the MCLR regime on bank borrowing is expected to result in lower cost of funds ahead, thereby providing impetus to margins. Post slippage seen in Q1FY17, asset quality is expected to remain stable with a near term recovery as the accounts that slipped in the previous quarter have been recovered. As of June 30, 2016, the capital adequacy ratio remains at a healthy ~21% aided by lower risk weighted assets.

With large growth opportunities in renewable energy project financing and PFS niche position, RoA, RoE still remain healthy and are expected at 3.0%, 15.3% in FY18E, respectively, aided by double digit PAT growth. Margins are expected to stabilise at 5.0-5.3%, with benefit from shifting to MCLR pouring in. Going ahead, we do not see any sharp asset quality deterioration at least in the near term. Therefore,they revise target multiple at 1.15x FY18E ABV (earlier 1.1x) at | 33.8. Consequently,revise their target price from | 37 to | 39 per share. They maintain HOLD rating on the stock.

Post steady asset quality in the previous three quarters, higher slippages disappointed at | 235 crore in Q1FY7. In Q1FY17, three loan accounts with aggregate exposure of | 235 crore slipped into NPA. Consequently, GNPA increased from | 293.7 crore in Q4FY16 to | 528.9 crore. GNPA ratio, therefore, rose 2.43% QoQ at 5.83% • PAT came in at | 67.4 crore, broadly in line with our estimate, owing to lower NII at | 99.4 crore, offset by lower provision at | 2.2 crore.

Valuation: They revise their target multiple downwards at 1.1x FY18E ABV (earlier 1.15x) at | 33.8. Consequently, they revise target price lower from | 43 to | 37 per share and, hence, maintain our HOLD rating on the stock.

Buy PTC India Financial Services CMP at RS. 36 add on Dips to band Rs. 36 - 32 for the target of Rs. 43, 50

ICICI Securities Ltd | Retail Equity Research PAT increased 2x YoY to | 49 crore (owing to higher provision in Q4FY15), below our estimate due to higher-than-expected provision...