Established in 1986, the company’s main area of operation includes, as the name suggests, purchase and lease finance, bill discounting and changing of money. It had joined hands with a bank in New Zealand known as the Wall Street Baking Corporation Ltd and thus branced out from Patel Roadways group to form Wall Street Finance Ltd.
In quarter 1, the revenues of the company fell by 5% when compared with the previous quarter primarily owing flat growth rate with the money transfer business. Also operating income was hampered because of the extremely volatile forex markets and the US scenario. However despite the case of such reduced revenue margin, EBIDTA rose by 6% which is high by almost 1.5% q-o-q. This is what helps the investor restore the confidence in the stock that despite topline fall, the profits remain strong. However the benefit derived from other income largely remained unchanged and profits rose due to cost cutting measures of the company.
‘Bell the Bull’ says As per the latest available data, the company provides fundamentals that are pretty unimpressive and the valuation of the company shows a very strong downside bias because of lowered estimates of operating margins as well as revenues and shadowed market sentiments. Despite this we remain strong that the stock’s price rise is not taking a downside, the estimates just project a smaller growth. On the NSE index, we feel that trading currently at Rs. 18, the stock should smoothly move to Rs.25, given the present trading volumes.