Edelweiss Research has initiated Coverage on SREI Infrastructure Finance Ltd with the following note,
SREINF is one of India's leading Non Banking Financial Institutions (NBFI) and the only private sector infrastructure financing NBFI with a customer base of over 15,000 clients and assets under management of over Rs. 8,000 crore. SREINF has entered into a strategic alliance with BNP Paribas Lease Group, a subsidiary of BNP Paribas of France, for equipment financing business through a joint – venture.
With huge government spending on infrastructure projects, strong investment and capex plans in 11th Five-year plan, we expect demand for construction equipment to grow, which creates huge potential for SREINF. SREINF has developed expertise in financing of infrastructure equipment (for construction, mining, oil & gas, power and others), infrastructure projects, infrastructure development and advisory in all verticals of infrastructure.
FY10E and FY11E EPS estimate of Rs. 10.5 and Rs. 12.3, the stock is currently trading at a P/E of 6.6x and P/BV of 0.65x on FY10E basis and at a P/E of 5.6x and P/BV of 0.60x on FY11E basis Buy with a Target price of Rs 80.
