Shriram City slips after brokerage terminates coverage

Shriram City Union Finance fell 1.31% to Rs 1,664.70 at 15:02 IST on BSE on reports a foreign brokerage has terminated coverage on the stock with a 'sell' rating.

Meanwhile, the BSE Sensex was up 188.08 points, or 0.68%, to 27,917.75.

On BSE, so far 478 shares were traded in the counter, compared with an average volume of 7,149 shares in the past one quarter.

The stock hit a high of Rs 1,671 and a low of Rs 1,631 so far during the day. The stock hit a record high of Rs 2,195.95 on 27 January 2015. The stock hit a 52-week low of Rs 1,398 on 27 June 2014.

The stock had underperformed the market over the past one month till 24 June 2015, sliding 4.57% compared with 0.81% fall in the Sensex. The scrip had also underperformed the market in past one quarter, falling 10.20% as against Sensex's 1.53% fall.

The large-cap company has an equity capital of Rs 65.91 crore. Face value per share is Rs 10.

According to reports, the brokerage has lowered earnings per share estimates by 2.2% to 3.8% over the fiscal year (FY) 2016-2017 factoring in trends from Q4 March 2015 results. The stock has outperformed Sensex over the past two years as investors have sought exposure to its niche business model focused on Small Enterprise Finance (SEF).

However, the brokerage reportedly continues to believe that current valuation has run ahead of the expected pickup in assets under management growth (AUM). According to the brokerage, AUM growth may only improve marginally to 17% (FY 2015-2017) versus 14% in FY 2015 and there is scope for disappointment from a more gradual recovery, reports added.

On a consolidated basis, net profit of Shriram City Union Finance rose 2.66% to Rs 155.38 crore on 11.5% rise in total income to Rs 929.57 crore in Q4 March 2015 over Q4 March 2014.

Shriram City Union Finance is India's premier financial services company specializing in retail finance. It 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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