*Sh SPTulsian recommendation* Tourism Finance

EPS :  7 ; P/E 10.64x ; Book Value 70 ; P/BV 1.06x​

• TFCI, as a specialized financing institution, has contributed significantly in terms of creation of tourism infrastructure throughout the country and thereby generating direct employment opportunities. The assistance sanctioned so far has helped in creating over 46,000 rooms in approved category of hotels which represents approximately 1/3rd of the total rooms’ capacity in the country. Around 80% of the advances are to hospitality sector. Within hospitality segment, major focus is towards 3star/ Budget category hotels.

• TFCI has also led to catalysing investments to the tune of 26200 Crore in the tourism sector by providing assistance to more than 787 projects

• Modi  Govt measures such as electronic travel authorization, Visa on Arrival and growth of new Tier II cities, are set to encourage tourism in India. Rating agencies expect 8-13% y-o-y growth in tourist arrivals over the next three-to-five years.

• 60%+ of incremental room supply over FY14-19e is targeted at the fast emerging mid-market/budget class. This synchronises well with TFCI’s growth strategy in its next phase of transformation.

• The country has around 29,000 rooms under development, which would be launched over thenext five years.

• The company doesn’t disburse more than Rs50 Cr at a single time to a borrower and also doesn’t lend to borrowers with <BB rating.

• Presently India has about 1,70,000 rooms in classified hotels and it needs additional 1,20,000 rooms, out of which 90,000 rooms in the mid-market/budget segment, over next-five years to meet the gap.

• 9MFY17 Co has achieved their net profit equal to what they have achieved in financial year 2016. This is an NBFC which is available at Rs 600 crore market cap and market price to book value is almost one. This is one of the cheapest NBFC plays.

• Healthy Dividend Yield 3 %