Outlook & Valuation: We expect STFC’s AUM to grow at CAGR of 13% over
FY2019-21E primarily owing to (1) post-election government to increase spending
on infra project (macro recovery), and (2) pre-buying of CV before the BS VI will
also improve the pricing of older vehicles. We expect STFC to report RoA/RoE to
2.7%/17.1% in FY2021E respectively. At CMP, the stock is trading at 1.2x
FY2021E ABV and 7x FY2021E EPS, which we believe is reasonable for
differentiated business model with return ratios. We recommend a BUY on the
stock with a Target Price of `1,385.

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