Motilal Oswal - MOSL: INDIABULLS HOUSING FINANCE (Buy)-Continued strong growth

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Motilal Oswal

Alpesh Mehta

MOSL: INDIABULLS HOUSING FINANCE (Buy)-Continued strong growth

Indiabulls Housing Finance: Continued strong growth

(IHFL IN, Mkt Cap USD8.6b, CMP INR1379, TP INR1630, 18% Upside, Buy)

Indiabulls Housing Finance's (IHFL) core operating performance was robust, with strong AUM growth (+32% YoY) and stable reported spreads. We note of a one-time gain of INR7.68b due to the sale of 10% stake in Oak North Bank to GIC, Singapore.
AUM growth was in line with trend at 32% YoY to reach INR1.1t. This was driven by 43% YoY growth in disbursements to INR130b. Management is bullish on supply pick-up in the affordable housing space.
Despite competitive pressures, IHFL managed to hold reported spreads steady at 3.22% (vs. 3.25% in 2QFY18). Management continues to guide for book spreads of 3-3.25%. Incremental cost of funds is around 7.5%.
The share of home loans in the overall book inched up 100bp QoQ to 59%. With the share continuously inching up (to the target of 66% by FY20), we believe spread pressure will continue.

24/01/2018 12 EN

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Motilal Oswal

Motilal Oswal Financial Services Ltd. is a reputed name in Financial Services and Online Trading with group companies providing services such as Private Wealth Management, Retail Broking and Distribution, Institutional Broking, Asset Management, Investment Banking, Private Equity, Commodity Broking, Currency Broking, Principal Strategies & Home Finance.

Motilal Oswal Securities is a group company of Motilal Oswal Financial Service Limited which started as a stock trading company and has blossomed into well diversified firm offering a range of financial products and services. Motilal Oswal has built a reputation as the source for best stock trading company and this has taken a wealth of experience, knowledge and expertise, constantly working in tandem, over the years.

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Analysts

Alpesh Mehta

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MOSL: INDIABULLS HOUSING FINANCE (Buy)-Continued strong growth

MOSL : HOME FIRST FINANCE COMPANY: Earnings in-line with sustained improvement in asset quality

MOSL : SHOPPERS STOP: Ticking the right boxes

MOSL : ERIS LIFESCIENCES: Enhanced efforts toward product launch-related activities

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