{"id":1106,"date":"2020-06-17T02:53:34","date_gmt":"2020-06-17T02:53:34","guid":{"rendered":"http:\/\/www.assetmultiplier.co.in\/blog\/?p=1106"},"modified":"2020-06-17T02:53:34","modified_gmt":"2020-06-17T02:53:34","slug":"need-to-raise-money-for-lending-activities-shriram-transport-finance","status":"publish","type":"post","link":"https:\/\/www.assetmultiplier.co.in\/blog\/2020\/06\/17\/need-to-raise-money-for-lending-activities-shriram-transport-finance\/","title":{"rendered":"Need to raise money for lending activities &#8211; Shriram Transport Finance"},"content":{"rendered":"<p><b>Update on the Indian Equity Market:<\/b><\/p>\n<p><span style=\"font-weight: 400;\">Markets witnessed a volatile day as Nifty touched intra-day low of 9,728 before closing the day 1.1% higher at 9,914. The top gainers for Nifty 50 were HDFCBANK (+4.4%), HDFC (+3.9%) and ICICIBANK (+3.4%) while the losing stocks for the day TATAMOTORS (-5.9%), INFRATEL (-2.9%) and INDUSINDBANK (-2.8%). The gaining sectors for the day were FIN SERVICES (+2.8%), BANK (+1.9%) and PVT BANK (+1.9%) whereas PSU BANK (-0.9%), REALTY (-0.8%) and PHARMA (-0.6%) were the losing sectors for the day.<\/span><\/p>\n<p><i><span style=\"font-weight: 400;\">Edited excerpts of an interview with Mr. Umesh Revankar, MD &amp; CEO, Shriram Transport Finance; dated 11<\/span><\/i><i><span style=\"font-weight: 400;\">th<\/span><\/i><i><span style=\"font-weight: 400;\">\u00a0 June 2020 from Economic Times:<\/span><\/i><\/p>\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Since the lockdown has been relaxed, the Company is getting a better understanding of the ground reality. The calculation is that the Company\u2019s customers who have taken moratorium are likely to keep paying but with a delay. Looking at the past behavior, customers may ask for some kind of discount or rebate. The Company has taken care of these things during the March quarter results.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">The Company has given moratorium to all eligible customers. Approximately 24% of the customers have made part payment in April. Another 52% of the customers have made part payment in May. Whatever customers pay will be treated as prepayment into their account.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">The Company keeps three months of liability in the balance sheet. This kind of buffer is present at all times. They continue to keep sufficient buffers to manage future liability as well. Whatever collection is coming is used to build that buffer further as lending is not done in an active manner.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">They are focusing on lending to customers for working capital requirements. The RTO offices are now open and hence the Company expects lending activity to pick up from next month.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">The Company has raised some money through TLTRO and some through term loan- both from public sector banks in May and June. The management has not yet discussed any equity raising plans.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Credit cost of the Company has gone up from 2% to 2.42% during the March quarter. They are confident of maintaining the credit cost at around 3% by September and maybe till <\/span><span style=\"font-weight: 400;\"><br \/>\n<\/span><span style=\"font-weight: 400;\">December.<\/span><\/li>\n<\/ul>\n<p><b>Consensus Estimate: (Source: market screener, Investing websites)<\/b><\/p>\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">The closing price of Shriram Transport Finance Ltd was <\/span><span style=\"font-weight: 400;\">\u20b9 652<\/span><span style=\"font-weight: 400;\">\/- as of 16-June-2020. It traded at 0.8x\/ 0.7x the consensus BV estimate of <\/span><span style=\"font-weight: 400;\">\u20b9<\/span><span style=\"font-weight: 400;\"> 859\/ 963 for FY21E\/ FY22E\/ respectively.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">The consensus target price of <\/span><span style=\"font-weight: 400;\">\u20b9<\/span><span style=\"font-weight: 400;\"> 935\/- implies a PB multiple of 0.9x on FY22E BV of <\/span><span style=\"font-weight: 400;\">\u20b9<\/span><span style=\"font-weight: 400;\"> 963\/-.<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">Disclaimer: \u201cThe views expressed are for information purposes only. The information provided herein should not be considered as investment advice or research recommendation. The users should rely on their own research and analysis and should consult their own investment advisors to determine the merit, risks, and suitability of the information provided.\u201d<\/span><\/p>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Update on the Indian Equity Market: Markets witnessed a volatile day as Nifty touched intra-day low of 9,728 before closing the day 1.1% higher at 9,914. The top gainers for Nifty 50 were HDFCBANK (+4.4%), HDFC (+3.9%) and ICICIBANK (+3.4%) while the losing stocks for the day TATAMOTORS (-5.9%), INFRATEL (-2.9%) and INDUSINDBANK (-2.8%). The [&hellip;]<\/p>\n","protected":false},"author":10,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[101,143],"tags":[],"_links":{"self":[{"href":"https:\/\/www.assetmultiplier.co.in\/blog\/wp-json\/wp\/v2\/posts\/1106"}],"collection":[{"href":"https:\/\/www.assetmultiplier.co.in\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.assetmultiplier.co.in\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.assetmultiplier.co.in\/blog\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/www.assetmultiplier.co.in\/blog\/wp-json\/wp\/v2\/comments?post=1106"}],"version-history":[{"count":1,"href":"https:\/\/www.assetmultiplier.co.in\/blog\/wp-json\/wp\/v2\/posts\/1106\/revisions"}],"predecessor-version":[{"id":1107,"href":"https:\/\/www.assetmultiplier.co.in\/blog\/wp-json\/wp\/v2\/posts\/1106\/revisions\/1107"}],"wp:attachment":[{"href":"https:\/\/www.assetmultiplier.co.in\/blog\/wp-json\/wp\/v2\/media?parent=1106"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.assetmultiplier.co.in\/blog\/wp-json\/wp\/v2\/categories?post=1106"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.assetmultiplier.co.in\/blog\/wp-json\/wp\/v2\/tags?post=1106"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}