Range
Stop Loss
Target
Dewan Housing (NSE Cash) - BUY
204 - 200
182
240
Daily Chart
Technical Evidences
Since last few weeks, the stock has been
consolidating in a range of ` 183-210.
The stock is on verge of breakout from a
‘Falling Trendline Resistance’ drawn by
joining intermediate highs of December
2015 and May 2016.
The ‘Bollinger Bands’ on daily charts have
narrowed significantly and thus a breakout
from the resistance and upper band could
lead to a trended upmove in the prices.
Considering the positive placement of
‘’PSAR’ indicator, we expect this stock to
give a decent up move in the medium
term.
Thus, it can be bought from current level to
a decline up to `200 for a target of `240
in coming three months. A stop loss can
be placed at ` 182.
Source: Falcon ( Chart time: EOD as on 08/06/2016 IST )
June 09, 2016
Stock Info
Dewan Housing Finance Corporation Ltd. (DHFL)
3rd largest private sector housing finance company: We expect DHFL’s AUM to
Sector
Housing Finance
grow at a CAGR of 21% over FY2016-18, as demand for housing in the middle & low
income group is picks up, while PAT CAGR is expected to be 22%.
Market cap
5,855
Seasoned and granular loan book with stable asset quality: Individual borrowers
Beta
1.6
account for 72%, while the high yielding loan against property (LAP+SME) and
projects loans account for 19% and 9% of advances respectively. Despite strong loan
growth, the GNPAs and NNPAs are likely to be at ~1.17% and 0.82%, respectively,
52 week high/low
268/140
for FY2017. We don’t expect any major deterioration in the asset quality going ahead.
Avg. Daily Volume
1,25,659
Lower cost of funds will help maintain NIM: Nearly 70% of the bank borrowings
are due for maturity over the next three years and swapping a part of that with non-
Face Value (`)
10
convertible debentures (NCDs), where it has ~100bp cost benefit, will help DHFL in
maintaining its NIM at ~2.9%.
Outlook: We expect the company to post a healthy loan book CAGR of 21% over
Shareholding Pattern (%)
FY2016-18E, which is likely to translate in an earnings CAGR of 22%, over the same
period. The stock currently trades at an attractive valuations of 0.9x FY2018E ABV,
which is at a discount to other HFCs. With ROE likely to touch 16.8% by FY18 from
Promoters
34.9
15% in FY15 we believe the valuation gap should narrow down going ahead.
MF / Banks / Indian Fls
2.6
Company Op Income NIM
PAT
EPS Adj BV ROA ROE
P/E
P/BV
(` cr)
(%)
(` cr)
(`)
(`)
(%)
(%)
(x)
(x)
FII / NRIs / OCBs
33.6
FY2017E
2,225
2.9
866
29.7
184.0
1.1
16.1
6.7
1.1
Indian Public / Others
28.9
FY2018E
2,688
2.9
1,084
34.6
215.3
1.2
16.8
5.8
0.9
June 09, 2016
Research Team Tel: 022 - 3935 7800
E-mail: [email protected]
Website: www.angelbroking.com
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Disclosure of Interest Statement
Dewan Housing
1. Analyst ownership of the stock
No
2. Angel and its Group companies ownership of the stock
No
3. Angel and its Group companies' Directors ownership of the stock
No
4. Broking relationship with company covered
No
Note: We have not considered any Exposure below ` 1 lakh for Angel, its Group companies and Directors.
June 09, 2016