Buy Indiabulls Housing Finance; target of Rs 1227: Motilal Oswal

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26 Aug, 2025 12:21

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Motilal Oswal's report onIndiabulls Housing Finance

Indiabulls Housing Finance's (IHFL) PAT grew 24% YoY to INR 8.4b (1% below our estimate) in a quarter that was characterized by strong disbursement growth (+44% YoY), stable spreads and cost-to-income ratio. The tax rate, however, was lower at 14%, the impact of which was offset by increased additions to floating provisions buffer. AUM growth of 33% YoY (+12% QoQ) was the highest in 19 quarters.

Asset quality trend is likely to remain stable. We expect RoE to cross 30% by FY20. We largely maintain our EPS estimates. We use RI model with Rf of 7%, CoE of 15% and terminal growth rate of 5%. Maintain Buy with a TP of INR 1,227 (3.8x FY19E P/B).

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