TFCI
 
  

 

SHARETIPSINFO >>Research Reports >>Tourism Finance Corporation of India

 

COMPANY OVERVIEW:
Tourism Finance Corporation of India was incorporated on 27th January, 1989. The main objective of TFCI is to promote financial assistance to tourism related activities/projects.

TFCI gives financial assistance in the following forms:
Rupee Loan
Underwriting of public issues of shares/debentures and direct subscription to such securities
Guarantee of deferred payments and credit raised abroad.
Equipment Finance
Equipment Leasing
Assistance under Suppliers' Credit
Working-Capital Financing
Takeover Financing
Advances Against Credit-Card Receivables
 
Eligibility for Assistance:
TFCI provides financial assistance to projects with capital cost of Rs. 3 crore and above. In respect of projects costing between Rs. 1 crore and Rs. 3 crore, TFCI will consider financial assistance to the extent of unavoidable gap, if any, remaining after taking into account assistance from State Level Institutions/Banks.


Prominent Clients:
Hotel Leela Venture Limited, Mumbai
ITC Hotels Limited, N.Delhi
EIH Limited, Delhi
Asian Hotels Ltd. (Owners of Hyatt Regency, New Delhi)
Delhi Development Authority
Tamilnadu Tourism Development Corporation
Madhya Pradesh State Tourism Development Corporation Ltd
Delhi Tourism Transport Development Corporation
Ministry of Railways
Government of Himachal Pradesh


INVESTMENT RATIONAL:
Strong Growth in Disbursements: TFCI has seen 15% YoY increase in disbursement. The key customer segment of the company Hotel industry has shown strong revival in demands.
Improvement in the Asset Quality: TFCI Gross NPA has decreased by 50% on YoY basis on back of good recoveries from the sale of seized hotels.
RBI De-Linked Credit to Hotel Industry from Commercial real Estate: De-Linking of credit to hotel from the Commercial Real Estate will help the hotel to get credit at cheap interest rate and relaxed norms.

SHAREHOLDING PATTERN:

 

NO. OF SHARE

% OF TOTAL

PROMOTERS

45294260

 

56.12%

INSTITUTION

1440315

 

1.78%

GENERAL PUBLIC

33982173

 

42.10%

GRAND TOTAL

80716748

 

100.00%

 

FINANCIAL:

 

 

31/03/06

31/03/07

31/03/08

31/03/09

TOTAL INCOME

65.17

64

66.86

70.96

EXPENDITURE

-13.36

-4.8

-4.78

-6.75

PBDITA

 

51.81

59.2

62.08

64.21

DEPRECIATION

-0.65

-0.61

-0.59

-1.73

PBIT

 

51.16

58.59

61.49

62.48

INTEREST

 

-35.81

-34.28

-31.75

-28.26

PBT

 

15.35

24.31

29.74

34.22

TAX

 

-3.5

-10.03

-8.01

-10.26

PAT

 

11.85

14.28

21.73

23.96

Key Highlights:
CAGR in Total Income is 2.84%.
CAGR in PBDITA is 7.3%.
CAGR in PAT is 26.1%.
RATIOS:

 

 

31/03/06

31/03/07

31/03/08

31/03/09

EPS

 

1.4680968

1.76915

2.69213026

2.968405

PBDITA MARGIN

 

79.49977

92.5

92.8507329

90.4876

NPM

 

18.183213

22.3125

32.5007478

33.7655

INTEREST COVER

 

1.4286512

1.70916

1.93669291

2.210899

Key Highlights:
EPS has grown at CAGR of 26.1% over the last four year period. The rise in EPS is because of increase in operational efficiency.
PBDITA margin increased from 79.5% to 90.5%.
NPM increased from 18.1% to 33.7%.
Interest Cover has moved up from 1.4 to 2.2.


COMPARISION OF Q2FY2010 WITH Q2FY2009:

 

 

Q2FY09

% CHANGE

Q2FY10

TOTAL INCOME

18.26

15.6626506

21.12

EXPENDITURE

-2.47

 

-1.99

PBDITA

 

15.79

21.15262825

19.13

DEPRECIATION

-0.64

 

-0.48

PBIT

 

15.15

 

18.65

INTEREST

 

-7.25

 

-8.37

PBT

 

7.9

 

10.28

TAX

 

-3.01

 

-5.84

PAT

 

4.89

-9.202453988

4.44

Key Highlights:
Total Income grew by 15.6% in Q2FY10 on YoY basis.
PBDITA grew by 21.15% in Q2FY10 on YoY basis.
PAT declined by 9.2% in Q2FY10 on YoY basis. The decline was mainly because of higher tax provisioning in the quarter.

VALUATION &OUTLOOK:
At cmp of Rs 25.90 stock is trading at 7.7X to FY10E EPS. We expect Rs 3.5 EPS in FY10E.We value the stock at 10X, the fair value we arrive at is Rs 35.
The stock is expected to outperform the market as it is undervalued at current price. Company also has good dividend paying track record. The dividend yield at current market price is 4.3% which limits the downside on the counter. Investors should buy this counter at every decline and buying range should be between 23-25.

CONCLUSION:
Investors with at least 6-8 month investment horizon could take position on the counter.

 

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