Hold GIC Housing Finance; target of Rs 530: Centrum

Centrum's research report on GIC Housing Finance

We lower our rating on GIC Housing Finance Ltd (GICHF) to Hold, even as we revise our TP upwards to Rs530 (valued at 2.5x FY19E ABV). The upward revision to our multiples follows a) greater degree of comfort that we draw from GICHF’s loan growth and earnings and b) our interactions with various stakeholders (NHB, housing finance players, rating agencies) that point to favourable sector dynamics in the affordable housing space (including the extended scope of the scheme) under the Pradhan-Mantri Awas Yojana (PMAY) - Urban, the key segment of focus for GICHF.

Outlook

We thus lower our rating to Hold, even as we revise our TP upwards to Rs530 (valued at 2.5x FY19E ABV). Higher pre-payments and or elevated NPAs remain key risks.