Positive on SREI Infra, Shriram Transport: Sunil Shah

ET Now spoke to Sunil Shah, Director Equities, Indsec Securities and Finance Ltd on his outlook on the market.

In the NBFC space, with counters like SREI Infra in the banking licence, how much of a trigger do you think it is for counters like these? Would you pick it up at this point or would you stay off till there is a correction?


Sunil Shah: Well if you talk about the stock specifics like SREI Infra or a Shriram Transport both the companies are in excellent business and SREI Infra is largely doing the infrastructure finance segment and if at all they are able to procure the banking licence the cost of funding for them will reduce drastically.

So on the one side you will have a cheaper cost of borrowings and on the other, you have a core business in which you have significant strength that will result in huge amount of improvement in the NIMS for Shriram and SREI Infra as such.

So I think it’s a good stock to be in and it is at a fair valuation as well. Likewise in the case for Shriram Transport meaning it would be trading at about close to 2.8 times adjusted price to book kind of a ratio. I think the company has its inherent strength then if they are able to get the licence it should certainly benefit and I would be really positive on both the stocks, both SREI Infra as well as Shriram Transport.