SKS Microfinance – a Magical Mix

  • Date: 01st Sept, 2015
  • CMP: Rs 457
  • Mid Cap – with Mkt Cap of Rs 5800 crores
  • Advice: High risk, high return stock, BUY
  • Target: Rs 844 by Mar 2017, an 85% appreciation

Summary

Overview: SKS Microfinance is a leader in small business loans for low income people in rural and village areas. State policy changes in AP in 2010 affected operations and SKS plunged into losses. But now the recovery is complete. Total income, NII (Net Interest Income) and Net Profit have grown at 24%, 22% and 36% CAGR over the last 7 years. NPA levels are quite low.

Why buy now: 1) SKS has a magical mix of Social Service and Good Business. 2) It’s a turnaround opportunity that is stabilizing now, and the firm should be able to grow at 40% CAGR over the next 2 years 3) In a recent correction, it has fallen 22% in the last month from a recent high.

The rest of this report is available on this LINK – JainMatrix_SKS Aug 2015

DISCLAIMER

This document has been prepared by JainMatrix Investments Bangalore (JM), and is meant for use by the recipient only as information and is not for circulation. This document is not to be reported or copied or made available to others without prior permission of JM. It should not be considered or taken as an offer to sell or a solicitation to buy or sell any security. The information contained in this report has been obtained from sources that are considered to be reliable. However, JM has not independently verified the accuracy or completeness of the same. Punit Jain has a personal shareholding in SKS since Nov 2014. Other than this, JM has no known financial interests in SKS or any related firm. Neither JM nor any of its affiliates, its directors or its employees accepts any responsibility of whatsoever nature for the information, statements and opinion given, made available or expressed herein or for any omission therein. Recipients of this report should be aware that past performance is not necessarily a guide to future performance and value of investments can go down as well. The suitability or otherwise of any investments will depend upon the recipient’s particular circumstances and, in case of doubt, advice should be sought from an independent expert/advisor. JM has been publishing equity research reports since Nov 2012. JM has applied for certification under SEBI (Research Analysts) Regulations, 2014. Any questions should be directed to the director of JainMatrix Investments at punit.jain@jainmatrix.com .

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