Q4 results: Review of Dewan Housing, ITNL, TRF

In an interview with CNBC-TV18, Lancelot DCunha, CEO, Sharyans Wealth Management, reviews results of Dewan Housing, ILandFS Transportation Networks (ITNL) and TRF.

Below is the verbatim transcript of his interview with Gautam Broker and Reema Tendulkar of CNBC-TV18. Also watch the accompanying video. Q: You like Dewan Housing. What is the target price that you have set? A: Target price is about Rs 370 on the stock. They have come out with very good results post their acquisition of Deutsche Postbank. They have now become the largest lender to the middle and low income housing finance segment. With a loan book of about Rs 19,930 crore, this has been achieved with fairly good asset quality. They have very low non-performing asset NPAs, gross NPAs of 0.77%, which is very good for the industry. Return of Assets is one thing which is very interesting. In this company, it is almost 22% which is much higher than the 19% that we have seen in LIC Housing Finance and about 18-19% even in HDFC. So, at the current market price, it is trading at about 1.5 times book value as compared to 3.5 times for HDFC, and 2.5 times FY12 book value for LIC Housing Finance. Going forward, I see significant traction in the lower and middle income housing segment as real estate developers start producing low income and affordable housing. And that is really putting demand into tier-II and tier-III cities where Dewan Housing is really poised to take advantage of this kind of growth. So, it looks to be really attractive from these current levels. With a one year time horizon you can look at a target price of Rs 370 or so. Also read: Dewan Housing Q4 net profit up at Rs 58.6 cr Q: The next on your list is ITNL. Do you think it is not been so aggressive like some of its peers like IRB, does that appeal to you? A: ITNL is one of the companies, which has been a little conservative as far as bidding for toll projects. It has a mix of both toll and annual equity based projects. In the current year, we are seeing a good traction on their projects. The last quarter has been one of their better quarters where gross income actually has gone up to about Rs 1,600 crore from Rs 700 crore quarter-on-quarter. They have also been able to do a complete financial closure for about Rs 5,200 crore projects. They have almost Rs 9,200 crore projects in the pipeline. So, going forward, with NHAI focused on awarding about 17, 000 kms worth of projects in the pipeline, we will see with greater execution, ITNL actually developing a very good portfolio of road projects which will be giving them earnings of almost Rs 16 next year. Presently, it is trading at about 1.5 times its book value and it is trading about 10 times its current earnings per share (EPS). So, I think this is a fairly good safe bet with relatively low downside risk from these levels. Q: TRF came out with the disappointing set of numbers, but that day the stock has already crashed 20%. Do you see more downside in TRF limited? A: I don