We recommended Shriram City Union in Mar'14 at the price of Rs. 1,020. We further gave an additional update in a report titled - Shriram City Union: 62% Returns in 6 Months. Over the last 2 years, the stock has gone up from Rs. 1020 to Rs. 2171 giving returns of 113%.

Earnings growth for Shriram City Union has been relatively slower on account of migration to 90 days of NPA recognition. This process will end in FY18 and earnings will accelerate only in FY19. Also, the small finance banks like Ujjivan and Equitas have entered the SME lending space, which had until now been the forte of Shriram City Union. In this context, considering its valuations of 3 times book value, we recommend to exit from Shriram City Union at current levels.
We will review the same at the appropriate time.

Share On