First Leasing Company of India - Rs.46.50

Incorporated in 1973, First Leasing Company of Indian Ltd (FLCIL) was promoted by Mr. Farouk Irani as the First Leasing Company of India. In fact, FLCIL introduced leasing to India three decades ago. Subsequently, it commenced Hire Purchase in 1986 and diversified into consumer finance in 1988. The company was appointed as financial consultant to the financial wing of the Indian Railways and is the chairperson of the Association of Leasing & Financial Services companies over the last 7 years and has been invited number of times to address the World Leasing Conference at Washington, Sydney, San Francisco, Istanbul, Mexico, Dublin and Hong Kong. FLCIL holds the respectable Triple 'A' credit rating from Fitch, a wholly owned International Credit Rating Agency and from CARE in India.

FLCIL is primarily engaged in financial activities viz. Lease Financing, Hire Purchase Financing and Loans. It has various products in its account like Lease, short term leases, Long term leases, operating leases, sale and leaseback, Hire Purchase, Consumer Credit, Inter Corporate Deposits, Fixed Deposit etc. Today, leasing has become an essential part of the Indian Financial System. From consumer finance to pharmaceuticals, heavy industry to telecommunications, railways to electricity boards, leasing constitutes an important source of funds for almost every sector of the economy. The company has broken new ground in offering a software lease product to the IT Industry, working closely with a major software Leasing Company in the US. It has also begun to negotiate Real Estate leases in the key metro cities and is all set to tap the most promising prospect of Aircraft Leasing. FLCIL is also engaged in Wind Power Generation but to a limited extent.

The company has complied with all applicable regulations as per RBI’s directives to NBFCs. Its capital adequacy ratio stood at 24.11% as at 31st March 2005 as against the minimum requirement of 12%. It can boast of maintaining a very low NPA of around 1%. Notably it is one of the few companies in India that has an uninterrupted dividend record for the last 30 years and was the first finance company to issue bonus shares in 1983 in the ratio of 1:3. For FY05 its revenue witnessed a degrowth of 7% to Rs.110 cr. whereas NP increased by 12% to Rs.24 cr. due to lower depreciation provision. For FY06, it is expected to grow marginally and may report a NP of Rs.25 cr., which means an EPS of Rs.11. With a Book Value of Rs.75 and dividend yield of 5%, this becomes a safe bet in the current scenario. Investors are recommended to accumulate this scrip at current levels with a price target of Rs.75 (i.e. 60% returns) in 12~15 months.