LFIN value

[HAL9000Top contributor]

LFIN reported some staggering quarterly EPS of 8, I think it's already getting investors attention, I guess now the faire value is clearly above 200, this should trade above the price of CFIN. Im more interested in the holding company VONE now, which is already trading below it's NAV, and all its subsidiaries have done well, VONE also got rid of poorly performing Orit apperal recently. First it should break the IPO price Rs. 25.

[slstockVeteran]

Yes, LFIN is worth over Rs 200 as I mentioned as hint ( to break all time high). After NP sold is stake and gold issue prices came down.
Am not sure it should surpass CFIN due to asset value though.

VONE is attractive ( mentioned else where in the forum). They should get a re-rating as their other holding are performing well.

[stocks hunterTop contributor]

A company worth of Rs200 and over is trading below Rs180. This is a sure Rs20+ share. Can recommend to anybody without any fear.

Look at the directors purchasing. From June 2014 untill end of Oct2014 continuously they have purchased this share. That indicates this has a value over Rs200 as well.

[sereneTop contributor]

A company worth of Rs200 and over is trading below Rs180. This is a sure Rs20+ share. Can recommend to anybody without any fear.

Look at the directors purchasing. From June 2014 untill end of Oct2014 continuously they have purchased this share. That indicates this has a value over Rs200 as well.

[poor boyActive Member]

before end of this year it may go up beyond 200.in my opinion we can expect a good dividend too.

[pathfinderTop contributor]

Warming up with his younger brother

[sashimaalTop contributor]

It will warm up till its father - NP comes and takes it there.

Warming up with his younger brother

[HAL9000Top contributor]

LFIN will report EPS over 30 and dividend of 7-8. Dividend date is around the corner. I think recent rate reduction will affect B&F companies positively in coming quarters.
Now loans getting cheaper and cheaper,
1.3 million Government servants,who belongs to middle income category, suddenly got 10 000 salary hike, coupled with reduced cost of living, electricity bills etc. Petrol/Diesel prices also slashed. Duty of small vehicles less than 1000 cc also slashed, stimulating most of them to become vehicle owners .  We will see new set of vehicle owners in coming 2 years. Expanding middle class-Good impact for the overall economy.

IMHO, it's releasable to assume Finance/leasing companies are in advantageous position. Finance stocks would be  winners for next few quarters since most banks already in fair value, while most Finance companies are still at P/E 6-8 which is very attractive.

Value others opinion, What would be the fair value P/E ratio for Finance stocks, If we assume P/B 2.0- 3.0 is fair for banking stocks ?

[smallvilleTop contributor]

No.. LFIN & CFIN cannot be valued alongside due to asset-base. However, LFIN seems to be warming up for a run.

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[HAL9000Top contributor]

Yes , I was telling P/E ratio for finance stocks and P/B ratio for banks. So what would be the fair value P/E for finance stocks.  I feel in this conducive environment PE ratio of 10 would be fair for stable large players like PLC, LFIN, CFIN etc.

In that case both LFIN and CFIN worth above 300, Specially LFIN is very attractive at current price.

[RunnerX]

statictical data is only one thing for good share. there is lot of things other than to thos things, if ststictical data can say what is price increseing share in the future, then all the peoples are follow that share. and there is no losers. for example take the nestle, ctc, jkh, comb (biggest 4 companies of cse). compare and look their price movement and statictical data in last 10 years. then you can see what i am considering.

[Future123Active Member]

LFIN is trading at a PE of less than 6 times.
LFIN can report an EPS of Rs. 30. for 2014/15.

LFIN is the best finance company in terms of dividends. We can expect a 8/= dividend this time.

[smallvilleTop contributor]

Yes , I was telling P/E ratio for finance stocks and P/B ratio for banks. So what would be the fair value P/E for finance stocks.  I feel in this conducive environment PE ratio of 10 would be fair for stable large players like PLC, LFIN, CFIN etc.

In that case both LFIN and CFIN worth above 300, Specially LFIN is very attractive at current price.

Financial institutes or banks, both are in the similar business, therefore, PBV is the correct method of valuation. However, low PE also attracts investors compared with industry avg.

[wagonr]

CFIN P/E around 5. I feel CFIN is move around 350 and LFIN 200

[sashimaalTop contributor]

CFIN is a very good share - will take its time and move

[wagonr]

Is it okay to enter LFIN @ current levels

[HAL9000Top contributor]

As expected LFIN has reported EPS of 31 for the past financial year. Last quarter aroun 9. NAV has gone up to 109. How we should revalue this now. Now it's look like a 270 + share. Coming quarters will show the real super performance, with massive spending, with low interest environment.

[RPPATop contributor]

As expected LFIN has reported EPS of 31 for the past financial year. Last quarter aroun 9. NAV has gone up to 109. How we should revalue this now. Now it's look like a 270 + share. Coming quarters will show the real super performance,  with massive spending,  with low interest environment.

Here is 4th Qtr results for LFIN.No growth in this Qtr. But still great performance for 2014/15.

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[RunnerX]

coming quarter they cannnot make performace according to this report. but they wil make another 500 mi profit. not bad, same position. also same with plc. but we dont no lolc, lofc, cocr cdb performance. there is fight for financial market shares (above all of companies try to increse vehicle lease rental, hire, etc side. it is make growth problem for plc, lfin and cfin).

[smallvilleTop contributor]

Though the revenues up in March quarter compared with 3.48 bil in 2014 to 3.81 bil in 2015, impairment charges have eaten up to the profits. 476 mil in 2015 March qtr compared to 115.9 mil in 2014 same qtr.
Adding insult to the injury other expenses have gone up to 338 million compared to 183.5 mil in 2014 and losses made in dealing with Government securities of 91 million is extra ordinary compared to 16.2 mil in 2014.

Despite a bad Q4, the year ended results show a commendable growth.
- The company reported a 9% growth in FY 2015 revenue of 14.79 bil compared to 13.63 bil in 2014.
- Interest income improved by 8% to 14.7 bil compared to 12.7 bil in 2014 and interest expenses have gone down by
17% to 5.9 billion.
- In FY 2015, LFIN recorded a 60% growth in profits to 2.17 bil compared with 1.36 bil in 2014.
- EPS stands at a staggering 31.51 compared to 19.35 inb 2014.
- Impairment losses went up extraordinary to 1.8 bil in 2015 compared to 570 mil in FY 2014.
- Gold load losses reduced by 84% to 214 mil compared with 1.37 bil in 2014.

NAV stands at 114.46 and the PBV is 1.53 which is less for a financial institute. Fair value based on 2X PBV is Rs. 229/-.

LFIN is liable to pay Super Gain Tax. The company has identified under the draft bill of parliament (approval pending) an amount of Rs. 484,230,584/- will have to be paid in three installments due on 15th of May, July and September 2015.
Equally divided, its 161.4 million each qtr.

The company also has 5 year bonds at 8.76%.

Can someone explain the rational of impairment losses pls?

[pathfinderTop contributor]

Thanks Small for analysis,you saved my time

[sashimaalTop contributor]

Thanks Small , +

[xmartTop contributor]

Thanks small. +

Investopedia says,

Impairment occurs when a business asset suffers a depreciation in fair market value in excess of the book value of the asset on the business' financial statements.

The technical definition of impairment loss is a decrease in net carrying value, the acquisition cost minus depreciation, of an asset that is greater than the future undisclosed cash flow of the same asset. An impairment occurs when assets are sold or abandoned because the company no longer expects them to benefit long-run operations. This is different from a write-down, though impairment losses often result in a tax deferral for the asset. Depending on the type of asset being impaired, stockholders of a publicly held company may also lose equity in their shares, which results in a lower debt-to-equity ratio.

anyway, super performance by both FINs it seems. market looks attractive. but i smell some correction on the way. do any of you?

[HAL9000Top contributor]

market looks attractive. but i smell some correction on the way. do any of you?

I smell the same, we'll see some movement with the counters releasing good performance, but pull back in subsequent days, we might get some opportunities.

[Future123Active Member]

A company which reported an EPS of 31/= trading at 175/=. LFIN needs to be trading at a decent price definitely than this. Current PE is just 5.6 times.

LFIN could have reported an EPS of over 12/= for the last quarter if the impairment losses could have been limited to 50% of present amount. Must take measures to minimize the staggering impairment loss which is almost same as quarterly profits.

LFIN EPS is almost 3 times more of CDB  and nearly 4 times of COCR. Somewhat closer to CFIN.

Why does LFIN has to pay 25 % Super Gain Tax? The PAT for 2013/14 is only Rs. 1.34 billion which is less than SGT liability of Rs. 2 billion. I think if the holding company reports over Rs. 2 billion then individual companies also taxed for SGT. This is very unfair as this would result in double taxation.

Similarly most of DP companies will be paying 25% Super gain taxes. Eg: PARQ, VFIN, LWL, RCL, LALU, ALUM, HAYL. Though the smaller companies make very small profits still liable to pay SGT due to group effect. Therefore, the dividends will be affected for the shareholders. The Government should think twice about this unfair super gain taxes which affects smaller companies and small time investors and their returns by the way of dividends.