Motilal Oswal - MOSL: GRUH FINANCE (Neutral)-Steady quarter

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Motilal Oswal

Alpesh Mehta

MOSL: GRUH FINANCE (Neutral)-Steady quarter

Gruh Finance: Steady quarter

(GRHF IN, Mkt Cap USD3.8b, CMP INR592, TP INR540, 9% Downside, Neutral)

Gruh Finance’s (GRHF) PAT rose 28.3% YoY to INR822m (in-line) in 3QFY18. The quarter was characterized by a strong pick-up in disbursement growth (due to a lower base), stable margins and good asset quality.
Loan growth was in line with trend at 18% YoY, driven by retail home loans. However, disbursement growth was robust at 37% YoY – a pleasant surprise – led by home loans and LAP. Developer loan disbursements were largely in line with trend.
Interestingly, GRHF was able to sustain yields at 11.8% (same for the past three quarters), despite a very competitive environment. Cost of funds witnessed a minor uptick (+7bp QoQ), mainly due to a rise in GSec yields.
Asset quality was stable, with GNPL/NNPL ratio of 73bp/7bp. However, there was an 11/18bp QoQ/YoY rise in the GNPL ratio of home loans.
While capital adequacy is sufficient at the moment, GRHF might look to raise capital a year or so later if loan demand picks up.

24/01/2018 10 EN

Provider

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: GRUH FINANCE (Neutral)-Steady quarter

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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