Buy Dewan Housing; target of Rs 220: Sunidhi Securities
Sunidhi Securities is bullish on Dewan Housing Finance Corporation and has recommended buy rating on the stock with a target of Rs 220 in its May 25, 2013 research report.
Sunidhi Securities`s research report on Dewan Housing Finance
"Incorporated in Maharashtra in 1984 as Dewan Housing Finance & Leasing Co, it was renamed as Dewan Housing Development Finance and further to Dewan Housing Finance Corporation (DHFL). The company, which commenced its activities in Aug.'84 has several branches all over India. It was promoted by the late Dewan Kuldip Singh Wadhawan and his family. DHFL is recognised as a private housing finance company by the Government of India and the RBI has also considered it eligible for refinance and financial support from the National Housing Bank. DHFL has been permitted by the RBI to accept NRI deposits. It provides housing finance to individuals, co-operative societies, corporate bodies or their nominated employees, groups of persons, etc, and leases commercial and residential premises to reputed companies.”“During Q4FY13, net profit surged 110 percent to Rs 196.9 crore on 140 percent higher operating revenue of Rs 1727.3 crore. NPM stood at 11.4 percent against 13.0 percent in Q4FY12. Q4FY13 EPS stood at Rs 15.4 against Rs 8.0 in Q4FY12. During FY13, net profit advanced 39.6 percent to Rs 451.9 crore on 28.7 percent increased operating revenue of Rs 4140.4 crore. NPM stood at 10.9 percent against 11.1 percent in FY12. FY13 EPS stands at Rs 35.2 against Rs 27.7 in FY12. A final dividend of 30 percent has been declared apart from 20 percent interim already paid earlier. DHFL was set up with a vision to transform the lives of millions of Indians living just beyond the consideration zone of the Mortgage industry by giving them access to home loans. DHFL has been unwavering in its commitment to serve the lower & middle income groups. Even after 29 years, it remains a financial institution with the systems, processes and dedication to serve this socio- economic group."“DHFL has always been customer driven. In doing so it has continually endeavored to innovate and reach out to the vast majority of the low & middle income groups. DHFL has been continuously introducing new products and variants for its customers. It introduced a Non-Income Proof Scheme called ‘Samarth’ for self employed individuals. Along with housing finance, DHFL provides a free Triple Protection Plan* (terms & conditions apply) to secure the interest of its customers in case of damages due to natural causes and personal accident. DHFL in association with leading financial Insurers in India offers unique home loan linked insurance plans that come at a premium. Such plans provide security to the family of the borrower in the unfortunate event of the death of the borrower. It is estimated that the housing finance industry will be able to maintain a higher growth in fresh origination of residential home loans over next three to five years mainly due to increased affordability of the borrowers i.e. mainly due to demand for affordability housing projects. The evolution of the Indian real estate sector has been phenomenal since 2000, propelled by a growing economy, liberalized foreign direct investment policy and the higher yields the sector is offering.”“DHFL, today is gearing itself up to offer financial assistance to home buyers across various customer segments and simultaneously creating a platform to expand its balance sheet and reach a total Asset Under Management (AUM) of Rs 1, 00,000 crore by 2017. At the current market price of Rs 164, the share is trading at a P/E of 4.7x and P/BV of 0.65x on FY13E and a P/E of 3.6x and P/BV of 0.55x on FY14E. We recommend BUY with a target price of Rs 220 in the medium term,” says Sunidhi Securities research report. Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies 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. 
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