4QFY2018 Result Update | HFC
May 10, 2018
Dewan Housing Finance Ltd
BUY
CMP
`625
Performance Highlights
Target Price
`740
Particulars (` cr)
4QFY18
3QFY18
% chg (qoq)
4QFY17
% chg (yoy)
Investment Period
12 Months
NII
667
626
7
536
25
Pre-prov. profit
610
562
9
459
33
PAT
313
306
2
249
26
Stock Info
Source: Company, Angel Research
Sector
HFC
Dewan Housing Finance (DHFL) posted an impressive operating performance yet
Market Cap (` cr)
19,580
again in 4QFY18. The HFC’s business grew in the quarter with a 28% yoy rise in
Beta
2.3
loan book to `91,932 cr. In line with it, AUMs also increased by 33%yoy in the
52 Week High / Low
680.6/387.2
quarter. At the bottom line, the company’s net profit grew by 26%, aided by steady
Avg. Daily Volume
4,40,992
growth of 25% in net interest income, a surge of 70% in other income and a
Face Value (`)
10
BSE Sensex
35,216
reduction in cost with respect to income, which decreased by 120 bps to 25.4%.
Nifty
10,718
Asset quality intact even when advances surge
Reuters Code
DWNH.NS
Bloomberg Code
DEWH.IN
During 4QFY18, the company’s AUM grew by 23%, 57%, 42% and 61% in home
loans, LAP, corporate loan and SME loans, respectively. Aggressive growth is
witnessed in LAP as the interest rate is higher than that of home loans. This
Shareholding Pattern (%)
increasing concentration on LAP helps the NIM to be at 3% even with competitive
Promoters
39.2
rise in total loans and other assets. Off balance sheet, AUM stood at 17% of total
MF / Banks / Indian Fls
9.5
AUM as of 4QFY18. The company’s loan book also increased simultaneously. On
FII / NRIs / OCBs
20.5
yoy basis, disbursements and sanctions spiked by 85% and 81%, respectively.
Indian Public / Others
16.3
Added to this, borrowings increased by 11.3%, while the cost of funds was almost
same. The mix in borrowing remained largely unchanged with banks accounting
for 42% of total borrowings, followed by capital markets (40%) and others (18%).
Abs. (%)
3m 1yr
3yr
Even when the loans and advances soar, DHFL is careful about its asset quality.
Sensex
2.0
17.0
30.0
The company maintains an excellent asset quality with GNPA at 1% of the
DHFL
9.4
102.7
153.3
advances and NNPA at 0.5% at the end of 4QFY18. The company increased
provisions by 57%yoy and 30%qoq.
3-year price chart
Outlook & Valuation: We expect the company to post a healthy loan book CAGR
800
of 28.5% over FY2017-20E, which is likely to translate in earnings CAGR of 28%,
600
over the same period. At the current level, the stock is valued at 1.8x FY2020E
400
ABV. We maintain BUY on the stock, and retain our target price of `740.
200
0
Key financials (Standalone)
Y/E March (` cr)
FY2017
FY2018E
FY2019E
FY2012E
NII
1,859
2,460
3,114
3,789
Source: Company, Angel Research
% chg
25.5
32.4
26.6
21.7
Net profit
927
1,174
1,565
1,931
% chg
27.1
26.7
33.2
23.4
NIM (%)
2.3
2.5
2.6
2.5
EPS (`)
29.6
37.4
49.9
61.6
P/E (x)
21.3
16.8
12.6
10.2
P/ABV (x)
2.5
2.3
2.1
1.8
Jaikishan Parmar
022 - 39357600 Ext: 6810
RoA (%)
1.3
1.3
1.4
1.4
RoE (%)
14.4
14.0
16.6
17.8
Source: Company, Angel Research; Note: CMP as of May 10, 2018
Please refer to important disclosures at the end of this report
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