Buy GIC Housing; target of Rs 208: Firstcall Research

Firstcall Research report on GIC Housing Finance“GIC Housing Finance Limited (GICHFL) was incorporated as 'GIC Grih Vitta Limited' on 12th December 1989. The name was changed to GICHFL with a Certificate of Incorporation issued on 16th November 1993. The Company was formed with the objective of entering in the field of direct lending to individuals and other corporates to accelerate the housing activities in India. The primary business of GICHFL is granting housing loans to individuals and to persons/entities engaged in construction of houses/flats for residential purposes The Company was promoted by General Insurance Corporation of India and its erstwhile subsidiaries namely, National Insurance Company Limited, The New India Assurance Company Limited, The Oriental Insurance Company Limited and United India Insurance Company Limited together with UTI, ICICI, IFCI, HDFC and SBI, all of them contributing to the initial share capital.” “At the current market price of Rs. 187.05, the stock P/E ratio is at 9.32 x FY15E and 8.29 x FY16E respectively. Earning per share (EPS) of the company for the earnings for FY15E and FY16E is seen at Rs.20.07 and Rs.22.56 respectively. Net Sales and PAT of the company are expected to grow at a CAGR of 14% and 13% over 2013 to 2016E respectively. On the basis of EV/EBITDA, the stock trades at 8.48 x for FY154E and 8.43 x for FY16E. Price to Book Value of the stock is expected to be at 1.48 x and 1.31 x respectively for FY15E and FY16E. We expect that the company surplus scenario is likely to continue for the next three years, will keep its growth story in the coming quarters also. We recommend ‘BUY’ in this particular scrip with a target price of Rs.208.00 for Medium to Long term investment,” says Firstcall Research report. 

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