This is what I posted on COCR on this thread;
The original post has been modified to depict the PBV as of today..
Lets have a look at the COCR 2012/2011 figures in a nutshell;
Profit = 758.29 Mil (2012), 60.1 Mil (2011) - 12.5X profit growth or 1250% profit increase
Equity - 1019 Mil
No.of Shares - 218 Mil
NAV = 5.45 (Errata to financials)
EPS = 3.48
PBV = 2.8 (as of 18-10-12 share price)Advantages
1. Interest income, other income - More than doubled
2. Fair value of investment property - 27X increased.
3. EPS - 3.48 (0.28 in FY 11/12) which is a 12.4X increase
4. Fixed deposits - 365.3 Mil as compared to 110.6 mil in 2011 which is more than a 300% growth
5. Micro Finance - 2.7 Bil as compared to 1.07 Bil in 2011 which is more than a 110% growth
6. Other loan items - More loans have been provided in Educational, Business, Pawning in 2012.
7. Lease & Hire purchase receivables - Nearly doubled at 6.1 bil in 2012, 3.8 Bil in 2011
8. Loans and advance receivables - 2.1X increase..
9. Deposit from Customers - 6.76 Bil, a growth of over 75% from 2011
To be noted - Their Micro finance business is thriving.. Dis-advantages
1. Staff cost - Almost doubled (have to expect with the growing stage of a company. Also salary increments, new hires could've been necessary time to time)
2. Admin Expenses - Increased almost 1.5X
3. Bad and Doubtful loan writ offs - Almost doubled @ 114.1 Mil in 2012.
4. Investment in Securities - VONE 209,000 shares@ 5.225 Mil cost. Now valued at 3.97 Mil. Which is a loss of 1.25 Mil.
Fall in Securities - incurred a loss of 13.8 Mil (as of 30-03-12) financials. This value could've gone down since the market came up.
Conclusion (Not a buy sell decision)
At Today's avg price of 15.3, PVB = 2.8. This is a higher figure. . Normally when a finance company trade @2-2.5X, it was said to be normal and anything below 2 would've been considered undervalued too. This could be counter argued but mostly its an individual's preference of investing companies above 2.5X.
Therefore; on PBV basis the max value this should trade, imo, is about 13.5. When this was around 12 it was clearly undervalued and valuable.
For a share worth 15 rupees they've announced 1 rupee dividend earlier too and it brought the share to 18+.. Turned out to be a good dividend yielding company besides JINS.
Beside, take a look at companies like LFIN which eyes on aggressive growth strategies, opening up branches more than even 1 in towns.. The PBV of LFIN is too high for an investor consider but when we look at other factors, its attractive..
So as a an investment my opinion is COCR and PLC both are valued. The reason for COCR is the growth in micro finance and their revenue growth. Also its to be noted that leasing/hire purchasing section could see a fall back in coming days/months due to vehicle tax hike. That's why the more concentration was put into micro finance sector which in turn a thriving business in SL now..
Amal has posted on Micro-finance in detail above