MOSL: GRUH FINANCE (Neutral)-Impressive all-round performance
​Gruh Finance: Impressive all-round performance
(GRHF IN, Mkt Cap USD1.9b, CMP INR392, TP INR421, 7% Upside, Neutral)
- Gruh Finance (GRHF) reported PAT of INR1,104m (6% above our estimate) for 4QFY17, driven by strong loan growth, controlled operating expenses and lower provisioning charge.
- Loan growth for the quarter was a robust 19% YoY, marginally ahead of our expectation, driven by growth of 19% in housing loans and 37% in developer loans.
- Home loan disbursements were up a robust 59% YoY in the quarter. In our view, this could be due to pent-up demand in the system, but we await management clarity. Disbursements to developers were up 93% YoY, which, in our view, was a one-off. GRHF continues to scale back in LAP - disbursements were down 58% YoY, a trend similar to the prior quarter.
- Operating expenses declined 2% YoY to INR241m, driven by a 13% fall in other operating expenses. We believe this is due to lower branch opening expenses. As a result, C/I ratio declined 280bp YoY to 13%.
- GNPL ratio was largely stable YoY at 0.31%. The company continued to maintain nil net NPLs (0.09% in 4QFY16). Provisioning charge stood at INR14m v/s INR61m in 4QFY16 and INR327m in 3QFY17. Note that GRHF took large provisioning charge in 3QFY17 in order to take PCR to 100%.
GRUH Finance is a Housing Finance Company (HFC) based in India that is recognized by National Housing Bank. Co. offers loans to individuals for purchase, construction, repairs, renovation of dwelling units. Co. also offers loans to the Self-employed segment where in formal income proofs are not available. Co. also offers loans to professional for purchase of office premises. Co. maintains a network of approximately 152 office in 8 states of the country including: Gujarat, Maharashtra Karnataka, Rajasthan, Madhya Pradesh, Chhattisgarh, Tamil Nadu and Uttar Pradesh.
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.