The company is engaged in the businesses of leasing, hire-purchase and consumer-finance transactions. These activities provide an alternative source of finance for the industry, consumers and traders. With the growing expansion of industrial activity, the demand for capital goods, automobiles and Oil rigs are increasing sharply. Investment support from banks and financial institutions is inadequate to meet this demand. The leasing and hire-purchase industry helps bridge the gap between the need and availability of capital.

The main business of First Leasing Company of India is Leasing and hire purchase. First Leasing Company of India Limited introduced leasing in India during September 1973, more than 37 years back. First Leasing's operations are primarily focused at corporate dealing. The major clients of First Leasing are CitiBank, Johnson & Johnson, Volvo, Seimens Public Communications, ABB, ANZ-Grindlays, IDBI Bank, TELCO, Knoll Pharmaceuticals, Bayer etc. First Leasing commenced Hire Purchase transactions in 1986 and diversified into Consumer Finance during 1988. The company’s product portfolio comprises short term leases, Long term leases, operating leases, sale and leaseback, Hire Purchase, Consumer Credit, Inter Corporate Deposits and Fixed Deposit.

During the quarter ended 30th June, 2010, the operating revenue of the company remained subdued by 9.37% to Rs 37.25cr as against Rs 41.1cr during the corresponding quarter last year, on sequential basis the operating income fell by a massive 32.91% from Rs 55.52cr, primarily due to lower disbursements.

The operating profit of the company declined 11.43% to Rs 21.32cr as against Rs 26.23cr during the corresponding quarter last year, largely on higher expenditure cost. On sequential basis, the operating profit declined by 28% to Rs 35.41cr from 49.18cr mainly on account of lower interest earned by the company during the quarter.

For the quarter ended 31st March 2010, FLCL has reported a net profit of Rs 8.93cr as against a profit of 8.54cr during the corresponding quarter last year, on the back of lower interest expanded on both Y-o-Y basis and sequential basis (amounting to Rs 21.32cr) and stable depreciation.

The EPS for the quarter stood at Rs 3.92 as against the EPS of Rs 3.74 during the corresponding quarter last year and EPS of Rs3.49 in the preceding quarter

The total promoter shareholding in the company is 27.28% (as on 30th June 2010).

At the current price of 73, the stock is trading at just 3.81 & 3.24 times of our estimated FY11 & FY12 earnings. We thus recommend a ‘BUY’ with a Price target of 97.