"I personally focus on return on equity because the biggest strength that the company has is its shareholders," is the word coming in from Gagan Banga,Vice Chairman and Managing Director, Indiabulls Housing Finance because the shareholders have been very kind to them and allowed them to raise capital much before they needed it.
Would like the return on equity (RoE) to be in the range of 25-30 percent and our core business generates that kind of equity, says Banga in an interview to CNBC-TV18.
The RoE in FY09 stood at 3 percent is currently around 17 percent in FY17.
According to him, the big distinction between us and our peers is that we don't do business for market share and will do business only where it makes sense and where it is giving us positive return on asset and profit for shareholders.
Talking about the growth outlook going forward, he says on a micro basis the execution is to grow the loan book by Rs 2 lakh crore from current Rs 1 lakh crore by 2020 but for that the macros also have to play along. So unless there is a massive macro disruption, it is high probability event that we would get to the above number by 2020, he adds.
However, all going well, the profits could be around Rs 5500 crore by 2020 (FY18e PAT Rs 3500 crore) and the networth to be around Rs 27000 crore from the current Rs 12,500 crore by FY20. Till date the networth has grown from Rs 30 crore to Rs 12500 crore.
The numbers that we are sitting on allow us to compare ourselves to several large financial institutions, said Banga.
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