Buy Indiabulls Housing Finance; target of Rs 1600: Edelweiss

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26 Aug, 2025 12:21

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We hosted an “Investors Day” with top management of Indiabulls Housing Finance (IHFL) to get insight into the company’s business dynamics and strategic plans. The interaction with management reinforced our conviction on the strong credit framework and risk management practices at IHFL. Moreover, the thrust on digitisation and productivity improvement coupled with emerging opportunities indicates that IHFL is making strides towards its FY20 targets (loan CAGR of >25%, cost/income <10%, and credit cost of <50bps). Given rising demand for housing finance and the company’s stringent risk mitigants and strong track record, execution risks are minimal in our view. Maintain ‘BUY’.

IHFL is envisaged to sustain superior return ratios—RoA and RoE of 2.8% and >30%—riding optimal product strategy with stringent risk mitigants, stable franchise and high liquidity. The stock is trading at 2.8x FY20 P/BV. Maintain ‘BUY/SO’.

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