Investment Ideas Feb 2018 Presented by Yogesh Sane

Investment Ideas - Feb 2018 Presented by Yogesh Sane

CSL Finance Ltd • Former proprietary trading desk expanding as NBFC in Delhi NCR area. • Started real estate loans in 2013. Now expanding in SME loans (2 -25 lakh loans). • 20% Yield on Assets, 12% cost of funds. • Operated from a single office with 8 employees, now has 7 branches, 57 employees. FY 15 FY 16 FY 17 H 1 18 • AUM growing at 40%. 69 106 135 260 • Strong asset quality. 0% NPA. • Conservatively leveraged at 3. • Raised 50 Cr at 390 Rs/share from investors in 2017. • P/b value of 2. 3. 13 times FY 19 earnings.

Valiant Organics Ltd • Part of Aarti Group, Valiant is a manufacturer of chloro phenols used in agro intermediates and pharma industries. • SME IPO Oct 2016, 60 Cr Sales, 10 Cr PAT. • High ROE (36%), High Margin (18% Net) and debt free. • Currently operating at full capacity. • Planning to expand capacity from 4800 MTPA to 21600 MTPA over next 3 -5 years. • Company is merging another group company (Abhilasha) with itself. 60% dilution. • Abhilasha is growing at 40%, zero debt, and 16% net margin and 35% ROE business. • PE – 25 x TTM earnings. Appears expensive at current valuation, but expected to grow strongly over next 3 to 4 years.

SRG Housing Finance Ltd • HFC operating in Rajasthan, MP and Gujarat. Focus on affordable rural housing. • Home loans (78%), LAP (13%) and developer loans (9%). Maturing LAP and DL is fueling HL growth. • Avg Ticket (HL - 5 L, LAP - 16 L, DL – 125 L), tenure 2 -15 years, LTV 55%. • AUM 125 Cr, 22 Offices, PAT 7 Cr, Book Value 37 Cr. • AUM, NII, PAT growing at 60% for last 4 years. • 21% Yield, 12% cost of funds. 1. 3% GNPA, 0. 7% NNPA. 13% ROE. • First SME issue to be migrated to main board in India. • Raised funds via equity and debenture route in 2017. CAR 48%. • Planning to grow AUM 8 x (1000 Cr) in 4 years. • MCap 450 Cr, PE - 64, PB - 11.

NGL Fine Chem Ltd • Company is a manufacturer of veterinary APIs. • High gross margins - 62%, High ROE - 28%, Exports – 72% of sales, low debt. • Sales growth muted in last few quarters due to high capacity utilization. • New capacity to be commissioned in Q 3 & Q 4 of FY 18. • Strong sales growth (60 -70%) expected in FY 19 -21. Some margin growth possible. • Customers are waiting for the new capacity. • 21 times TTM EPS, 15 times FY 19 EPS.