Cup and Handle Breakout supported by Fundamentals
FY24 EPS 21.11(Q4 EPS 6.4), PE 10 and Book value is 170 and PB 1.25
From Q1 of FY25 the company will post min EPS of Rs 6.4/Qtr, even if we consider 25% growth its annual EPS would be 6.4*4*1.25 = 32 Rs/share
FY25 valuation at CPM of 212 would be EPS 32, PE 6.6, Book value 200 and PB 0.94
therefore as per FY25 estimation minimum price at which it must trade would be,
1.5 times PB = 300 (200*1.5)
10 times PE = 320 (32*10)
Target 1 = 246
Target 2 = 310
Q4 results ,
G.NPA would be 242cr vs 223cr (2.8% vs 3.06%)
N.NPA would be 92cr vs 102cr (1.4% vs 1.42%)
Provision would be 150cr vs 121cr (PCR - 62% vs 54%)
From Q1 of FY25 the company will post min EPS of Rs 6.4/Qtr, even if we consider 25% growth its annual EPS would be 6.4*4*1.25 = 32 Rs/share
FY25 valuation at CPM of 212 would be EPS 32, PE 6.6, Book value 200 and PB 0.94
therefore as per FY25 estimation minimum price at which it must trade would be,
1.5 times PB = 300 (200*1.5)
10 times PE = 320 (32*10)
Target 1 = 246
Target 2 = 310
Q4 results ,
G.NPA would be 242cr vs 223cr (2.8% vs 3.06%)
N.NPA would be 92cr vs 102cr (1.4% vs 1.42%)
Provision would be 150cr vs 121cr (PCR - 62% vs 54%)
Reason: Higher Provison 47cr vs my estimate of 40cr (EPS impact 0.66 Rs)
GNPA 242cr (2.94%), NNPA 70cr (0.86%), PCR 71%
FY25 Q1 Estimates
NII + Other income 350cr
-Cost to Income 210cr (60%)
+Insurance claim 25cr
PPOP 165cr
-Provisions 25cr
PBT 140cr
-Tax 35cr
PAT 105cr
EPS (105/10.62) 9.9Rs/share
Pros:
1. During Q1 the company has high chances of receiving back 25 to 30cr worth of insurance claim under CGFMU scheme ((40cr-3%)*72.5%)
2. 59% of unsecured book is covered under this CGFMU schem, hence the company has 22.5% risk upto 750cr default (8500cr*41%*15%) which will be received back (72.5% of NPA) by the company as Insurance claim once in a year
considering the above factors it is safe to assume minimum PAT of Rs 400cr ( 37.66Rs EPS) for FY25 this is a must investment stock with base target of 300Rs