IDFC

IDFC is positioned as a focused intermediary in infrastructure financing. It generates its income from core lending, as well has built a steady source of fee income business from its principal investments, asset management as well broking and investment from its acquisition of IDFC-SSKI.

With around US$500 billion investment required over the next 5 years in infrastructure sector, enormous opportunity pivots for the companies like IDFC. Its infrastructure loan growth is set to improve in the coming quarters with healthy approvals’ pipeline and improvement in economic outlook. Keeping in mind its high growth core business, asset management business, investments value, stake in SSKI and NSE, we believe the valuations on the basis of SOTP (Sum of the Parts) at current levels look very attractive. We recommend “Accumulate” the stock with price target of Rs 190 including ~Rs 45 per share for various subsidiaries and stakes in SSKI and NSE.