2010VP19 Indiabulls Financial Services Ltd

Indiabulls Financial Services Ltd
BSE: 532544 NSE: INDIABULLS
Price Rs 145.20 /145.35 (23.09.2010) - High / Low 196 /93
MCap Rs. 4506 crore
Paid up Share captial 61.98 crore (30.99 crore shares of Rs 2 each)
Book value Rs 130.8 EPS (09-10) Rs. 8.27 Dividend Rs 5
Promotors hold 32.41 pc, Foreign institutions 35.91 pc

Indiabulls Financial Services Ltd. is one of the fastest growing NBFCs in India, with assets under management (AUM)Rs 12530 crore as of June 2010 and a cumulative disbursal target of over Rs. 1700 crore for the year 2010-11.
Amongst its financial services and banking peers, it ranks amongst the top few companies both in terms of net worth at Rs 4054 crore,and capital adequacy, which stands at 28.48% as of June 2010. The company’s strength has been acknowledged and underlined by rating agencies that have consistently accorded high ratings to it. The company’s business strategy is focussed on mortgage loans which today constitutes over 70% of the advances.

The company has till september borrowed through NCD Rs 1910 crore @ 9.5 pa and issued 2.75 crore share warrant worth Rs 632.5 crore (convertable into shares @ 225 within 18 months). Leading banks and financial firms like Axis Bank, ICICI Bank, IDBI Bank, Central Bank, IOB, BOM, IDFC, SICOM, UTI MF, Reliance MF etc invested in the NCDs.

The company which had been an underperformer last year is all staged to grow at 38-40% in loan book for 2010-11 to reach gross advance of 13950 crore by March 2011

Q1 2010-11 financial shows a growth of 33 pc in total income
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Net profit of Indiabulls Financial Services rose 109.6% to Rs 128.24 crore in the quarter ended June 2010 as against Rs 61.17 crore during the previous quarter ended June 2009. Sales rose 33.02% to Rs 384.52 crore in the quarter ended June 2010 as against Rs 289.07 crore during the previous quarter ended June 2009. The company has also provided Rs 62.5 crore Q1 2011 as tax provision as against Rs. 31 crore Q1 2010

The full year figure for 2009-10 and estimates for 2010-11 is as follows
Particulars ----2009-10 -----2010-11
===========(Rs in crore)=======
TIncome ------1420.30---- 1835.00 (29.2%)
OpProfit --------927.80---- 1289.80 (39.0%)
NPBT-----------381.40---- -566.50(48.5%)
Inc Tax ---------130.40---- -171.50(31.5%)
NPAT-----------264.20---- -395.00(49.5%)
EPS ------------Rs 7.82 -------Rs. 11.70

At current price of Rs 145 the share trades
at PE of 12.4x forward EPS of Rs 11.70,
at P/BV of P/BV of 1x forward expected book value of Rs 145.60 (after capital conversion)
at divdend yield of 3.45 pc at expected dividend of Rs 5 per share
The share seems under valued considering the growth in business and valuation of companies in similar line of business