1
Please refer to important disclosures at the end of this report
1
1
GIC housing Finance Limited (GICHFL) is a leading retail housing finance
company in India. GICHF as being strategically important for GIC and expects it
to continue to receive management, operational and financial support from the
parent. With company’s focus on the salaried individual segment forming to be
more than 70% of total loan book. With stable profitability indicators over the
past few years and comfortable capitalization levels with growth targets being
met by internal accruals. Schemes like “Housing for All by 2022”, Smart Cities
Mission & launch of AMRUT would doubtlessly boost growth of housing finance
industry. Considering the huge opportunity size in housing finance in India,
GICHFL has increased the loan growth target significantly. The new CEO & MD,
who joined in November 2016, has set the internal target to double the loan
book to `16000cr by March 2019 from `7910cr in March 2016. Although
GNPA has improved substantially over FY11-FY16 from 2.78% to 1.76%. The
management is now strongly contemplating actively pursuing recovery to
improve asset quality going forward. The supporting factors for high loan growth
are Government’s subsidy scheme under the Prime Minister Awas Yojana (PMAY)
to accomplish the mission of Housing for All by 2022, such as interest subsidy to
Economically Weaker Section (EWS) / Lower Income Group (LIG) / Middle
Income Group (MIG-I & MIG-II) based on their categories and income,
Significantly low penetration in HFC space and Continuous expansion in the
branch network will help to achieve the growth aspired by the management. The
Company has been maintaining a healthy dividend payout of 26.51%. The
company has reported a healthy return on equity of 17% and profit growth of
14% CAGR for the last 3 years. Hence Buy.
BUY
CMP `524
52 Week High / Low
593/251
Avg. Daily Volume
32,459
Housing Finance
Market Cap (` cr)
2,821
10
BSE Sensex
31,159
Nifty
9,625
Face Value (`)
Reuters Code
GICH.BO
1.5
Vaibhav Agrawal
022 3935 7800 Ext: 6808
[email protected]gelbroking.com
GIC Housing Finance
Others | Housing Finance
May 31, 2017
2
GIC Housing Finance | Housing Finance
May 31, 2017
2
Research Team Tel: 022 - 39357800 E-mail: [email protected] Website: www.angelbroking.com
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Disclosure of Interest Statement GIC Housing Finance
1. Financial interest of research analyst or Angel or his Associate or his relative No
2. Ownership of 1% or more of the stock by research analyst or Angel or associates or relatives No
3. Served as an officer, director or employee of the company covered under Research No
4. Broking relationship with company covered under Research No
Ratings (Based on expected returns Buy (> 15%) Accumulate (5% to 15%) Neutral (-5 to 5%)
over 12 months investment period): Reduce (-5% to -15%) Sell (< -15)