Bullish on Indiabulls Housing Finance, stock likely to see 20% upside: Akash Jain
"We are structurally bullish on Indiabulls Housing Finance. One can expect an upside of 20 percent from current level as we believe that it is on right path to tap the big opportunity in Indian housing finance sector," says Akash Jain, Vice-president, Equity Research at Ajcon Global Services.
April 24, 2018 / 12:50 PM IST
We are structurally bullish on Indiabulls Housing Finance. One can expect an upside of 20 percent from current level as we believe that it is on right path to tap the big opportunity in Indian housing finance sector, has strong track record, enjoys robust AUM growth of 30 percent+ with meagre NPAs, gaining market share consistently, decently valued at over 3x at estimated FY20 Book Value.
The company also delivered excellent Q4FY18 and FY18 result. Its AUM stood at Rs.1.22 lakh crore in Q4FY18, 34.3 percent growth on YoY basis. The company’s net profit witnessed YoY growth of 22.6 percent on YoY basis to Rs 1030.4 crore.
Its consolidated total income clocked YoY growth of 23.02 percent to Rs 3,967.20 crore. Net interest income for Q4FY18 witnessed healthy growth of 22.1 percent on YoY basis to Rs 1,661 crores against Rs 1,360 crore in Q4FY17.
Its GNPA for Q4FY18 stood at 0.77 percent, which is flat QoQ. What we like about this company is the control on opex benefiting from e-home loan and smart city home loan initiatives. The management expects to draw further benefits as they scale smart city home loan branches to 100 (80 currently).
Going forward, we believe the company’s strategy to focus on retail loans will augur well in coming years. It continues to focus on increasing the proportion of residential home loans. It targets the share to 65 percent by FY20E.
The company aspires to achieve the following by FY23 - a) to achieve growth of 25 percent+ in its loan book to achieve its target of Rs 4,00,000 crore; b) earnings of Rs 5500 crore by FY20 and Rs 10000 crore by FY23; c) Cost/income of 10 percent by FY20 and 8 percent by FY23; and d) Credit cost of 50bps.Disclaimer
: The author is V
ice-president, Equity Research at Ajcon Global Services. The views and investment tips expressed by investment experts on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.