Moneycontrol
Last Updated : Sep 18, 2018 01:47 PM IST | Source: Moneycontrol.com

Buy DHFL; target of Rs 743: Cholamandalam Securities

Cholamandalam Securities is bullish on DHFL has recommended buy rating on the stock with a target price of Rs 743 in its research report dated August 16, 2018.

Broker Research @moneycontrolcom

Cholamandalam Securities' research report on DHFL


DHFL’s AUM grew to INR 1.21tn in 1QFY19 up by 37.1%YoY, 8.9% QoQ (vs. CSEC estimate of 31.1%YoY). Disbursements continued to grow sharply at 64.9%YoY. Off balance sheet AUM stood at 17% of total AUM as of 1QFY19. Going forward, the management expects loan book to grow by 20-24% p.a, till FY20E, predominantly driven by focus on affordable housing and SME segment. Growth in loan portfolio was largely led by SME (71.3%YoY), LAP segments (73.4%YoY) and Project Loans (49.2%YoY) whereas Home loans segment showed a steady growth of 23.5%YoY. Consequently, their share in the overall portfolio was noted at Home loans: 59%, Project Loans: 16 %, LAP: 21% and SME: 4%.


Outlook


The stock is currently trading at P/ABV of 1.9X, P/E of 10.5X FY20E. Healthy growth in loan book, improving cost of funds on account of change in borrowing mix, improving cost efficiency and stable asset quality paints a positive picture for DHFL, hence we maintain BUY rating and maintain the target price at INR 743, assigning a P/ABV 2.1X of FY20E.


For all recommendations report, click here


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.

First Published on Aug 16, 2018 04:17 pm
Loading...
Sections
Follow us on
Available On
PCI DSS Compliant