I have been following this blog and been part of the audience since last year. Trying my scuttlebutt here with PFS. Please forgive me if there are any mistakes in my below post as i am still a novice learner in this market ( I know this blog is here to encourage people like me ).
I have recently come across this not so hidden-gem but a potential investment PTC India Financial services (PFS). Posting my views and rationale here and expecting the financial sector experts opinion :). ( Believe Vinod and Dhwanil can shed more light .
PFS is promoted by PTC India Ltd as a special purpose vehicle to cater to the financial needs of the infrastructure sector in INDIA. PFS mainly concentrates on the needs of Renewable energy sector which is slated to see exponential growth over the next few years. The main difference between PFS and other industrial and infrastructure finance companies is that it takes part in the equity investment of the projects along with extending the financial assistance.
Given that NAMO is slated to become the PM of India, who is a pro development leader will certainly kick-off the investment process in India. Coupled with the immense potential that the Indian Infrastructure sector offers i believe the company is on the verge of seeing excellent growth in its loan book.
Financial numbers :http://www.screener.in/company/?q=533344( Thanks to Ayush )
Decent pedigree,60% promoter holding with no pledging.Available at very decent valuations 0.6 BV and 6 PE.
Nil Net NPA.
No dilution of equity as company is adequately funded with CAR at more than 32%.Immense potential to scale up their loan book if the infrastructure investment kicks start in INDIA post elections. Remember similar situation around 2009 for Bajaj finance as it was having very high CAR and when the economy started growing they havecapitalizedtheopportunity verywell by increasing the loandisbursements. Of course we cant compare Bajaj’s management with PFS.
High dividend payout ratio and the dividends will increase if the economy turns around and their equity investments see cash profits.
Cost of funds can decrease further if RBI starts cutting the interest rates.
Best in class rating for its funds.
Higher NIM’s may not sustain in the long term.
El-nino risk and Inflation risks persists which would eventually impact RBI’s decision on interest rates.
I know that i have not covered many points here. But believe experts in this forum will drive us in correct direction in taking the decisions.
disclosure : entry made around 14.9rs with 0.5% portfolio allocation. Have idea to scale it upto 10-15% levels.