MOSL: INDIABULLS HOUSING FINANCE (Buy)-Growth surprises positively-asset quality stable
Indiabulls Housing Finance: Growth surprises positively; asset quality stable
(IHFL IN, Mkt Cap USD8.6b, CMP INR1356, TP INR1650, 22% Upside, Buy)
- Indiabulls Housing Finance's (IHFL) core operating performance was robust. AUM grew strongly by 34% YoY to INR1.23t v/s our expectation of INR1.17t. A decline in reported spreads (-13bp YoY), an increase in leverage, and moderation in liquid money-related income led to 22% NII growth. Tax rate was at 18% for the quarter.
- Disbursements for the quarter were up 30% YoY to INR195b, driven by 50%+ YoY growth in core home loans. This drove 34% AUM growth. Management cited strong traction in affordable housing finance. We expect IHFL to continue delivering 25-30% AUM growth over the medium term.
- Loan mix and borrowing mix both were steady. Yield on loans was down ~80bp YoY, while CoF was down ~65bp. IHFL increased its PLR by 20bp on 1st April 2018. Hence, we expect the impact of rising GSec yields to be somewhat mitigated.
- Management targets to gradually increase the share of securitization in its loan book from 10% currently to 20% over the medium-to-long term.
- Asset quality was stable, with GNPL ratio of 77bp and NNPL ratio of 34bp. Credit costs are guided to decline to 50bp over the medium-to-long term.
Indiabulls Housing Finance is a housing finance company, provides home loans, loan against properties, and commercial vehicle loans primarily to salaried and self employed sectors in India. Co. offers loans against residential and commercial properties to small to mid-sized businesses, partnership firms, and private limited or closely held companies; and commercial loans, including new vehicle loans, used vehicle/refinance, top up loans, and balance transfers to various business owners. It also provides financial related advisory services and other related ancillary services; and sells insurance products.
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.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.