GIC Housing has target of Rs 110: SP Tulsian

GIC Housing has target of Rs 110, says SP Tulsian, sptulsian.com.

Tulsian told CNBC-TV18, "GIC Housing has posted good results. As the name indicates they are into the Housing Finance, they are financing largely to the individuals those who are going for the residential flats as well as the developers who are specially only into the developments of their residential premises and all sort of that."
He further added, "They don’t have a wide bookend. Generally whenever the housing finance company catering to these kind of segment have a very low NPA, low bad debts or very low stress assets kind of thing and they have a consistent performance and that is seen reflected into the Q1 results. They posted a top line of close to about Rs 130 crore with EPS of Rs 4.1 for the quarter."
"If you recall in FY12, Q2 had a bad year for the company and due to that there EPS was close to about Rs 11 for FY12. But I am expecting that the same trend which they have posted because of the every year addition to the net worth, the company is likely to post an EPS of close to about Rs 15-16 for FY12 and taking that into account share is ruling at a PE multiple of close to about Rs 6 on the historic or may be at about Rs 6-6.5 and going by the book value also it has a present book value of close to about Rs 90 and if I take a forward book value it will be about Rs 105. So it rules at about 0.85-0.9."
"The dividend has been consistently paid by the company to the extent of about 45% and as I said because FY12 had a lower profitability of close to about Rs 11 EPS. The same dividend of 45% was maintained by the company, which they declared for FY11 also. But expecting that may be probably in FY13 the dividend is likely to get raised to though the management is quite conservative, it may get raised to about 50% for FY13. So that also gives an effective yield of close to about 5-5.5% and this company is promoted by 5 insurance companies who have collectively holding about 43-44%."
"If you see all the housing finance companies if I just exclude the Dewan Housing which has been languishing because of its own region of some operated driven activity and all that, all the housing finance stocks are ruling quite well, HDFC, LIC Housing Finance. This is the only company or Gruh Finance which have also come out with good results. This is the only company which is ruling at such a low PE multiple. So probably if somebody can keep a view for a period of about 12 months, expect a price of Rs 110 and as I said even dividend yield of 5% plus for the stock looks quite effective." Disclosure - No holding or interest in above stock.