Buy DHFL, earnings growth likely to be over 28%: Angel Broking

JSW Holdings | Cash flow from operation in FY18: Rs 66 crore, FY19: Rs 89 crore and in FY20: Rs 103 crore. In the past 3-year, the stock price has risen 40 percent to Rs 2450 on August 25, 2020.

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26 Aug, 2025 12:21

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By Amarjeet MauryaSr. Equity Research Analyst, Mid-Caps at Angel Broking

Backed by healthy capital adequacy and increasing demand for home loans, Dewan Housing Finance's loan book is expected to report 23 percent growth over next two-three years.

DHFL sold 50 percent stake held by it in DFHFL Pramerica Life Insurance Co Ltd which added Rs1,969 crore to its net worth and increases its CAR by 400 bps, to 19.3 percent which should fuel growth for next 2-3 years.

Strong NIM on the back of lower cost of funds and lower credit cost will ensure healthy return ratios for the company. Despite strong growth, the company has maintained stable asset quality and we expect the trend to continue.

Dewan Housing Finance Ltd: Rating: Buy | Target: Rs 720 | Return 41%

We expect the company’s loan growth to remain 23 percent over next two years and earnings growth is likely to be more than 28 percent. The stock currently trades at 1.9x FY2019E ABV. We maintain Buy on the stock with a target price of Rs720.

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