Q3 Result Update
Revenue has decreased this quarter which i beleive may be of two reasons 1) Demonetisation 2) As this is 1st full quarter which includes only interest income and no income related to securities, so some impact of it.
On other side company profit has also remained same despite decrease in revenue due to increase in yield as companys cost of borrowing has reduced .
Employee cost has further increased maybe they are increasing their team for future growth.
9 month EPS = Rs 30 and Book value would be around 235 per share.
Company has shared investor update which includes:
CSL Finance Ltd is engaged in providin g mezzanine funding to smal and medium-sized borrowers in real estate development and education sector for meeting their short-term funding requirements for projects which are [n the last stage of completion The company operates out of Delhi and the loan portfolio of Rs 107.47 Cr as on December 31, 2016, is concentrated in the Delhi-NCR region
It proposes to enter into SME lending in Tier 2 & 3 cities with focus on relatively stable sectors like education, medical and retail traders. The company is in the process of building teams and processes for the same and aims to commence lending in the new segments in fourth quarter.
Demonetisation Impact - The good news is that there have been no defaults on its mid-sized corporate loans. In fact over 29% of the loans were prepaid by its borrowers who decided to reduce borrowings in uncertain environment. This has allowed the company to continue evaluate loan proposals and give out fresh disbursements.
We may see gross IRR of 18-20% from existing 20%-22% on our mid-sized corporate loan segment in the next financial year. Our cost of borrowing on our existing facility. has come down by 250 bps.
Disclosure - Holding few shares.