Shriram City gains after foreign brokerage initiates coverage

Shriram City Union Finance rose 1.63% to Rs 1,060 at 14:05 IST on BSE after a foreign brokerage initiated coverage on the stock with an overweight rating.

Meanwhile, the BSE Sensex was up 63.92 points, or 0.29%, to 22,119.13.

On BSE, so far 375 shares were traded in the counter, compared with an average volume of 15,533 shares in the past one quarter.

The stock hit a high of Rs 1,087.75 and a low of Rs 1,053 so far during the day. The stock hit a record high of Rs 1,230 on 3 April 2013. The stock hit a 52-week low of Rs 850.05 on 8 August 2013.

The stock had outperformed the market over the past one month till 25 March 2014, rising 7.37% compared with the Sensex's 5.77% rise. The scrip had, however, underperformed the market in past one quarter, falling 1.14% as against Sensex's 4.86% rise.

The mid-cap company has an equity capital of Rs 59.28 crore. Face value per share is Rs 10.

Shriram City Union Finance is an attractive investment option, with a proven retail lending franchise, competitive advantage in high-growth small business loans, strong balance sheet and profitability and attractive valuation, the brokerage said in its report.

Valuation of the company has scope to re-rate given strong relative positioning, improving fundamentals and fading overhangs, it added.

Net profit of Shriram City Union Finance rose 14.73% to Rs 129.09 crore on 0.2% decline in operating income to Rs 812.07 crore in Q3 December 2013 over Q3 December 2012.

As a deposit-accepting non-banking financial company (NBFC), Shriram City Union Finance is India's premier financial services company specializing in retail finance. The company has a comprehensive range of offerings comprising finance for two wheelers and three wheelers, four wheeler finance (both new and pre-owned passenger and commercial vehicles), personal loans, small business loans, and loan against gold.

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