Dewan Housing Finance (DHFL) posted an impressive operating performance yet
again in 4QFY18. The HFC’s business grew in the quarter with a 28% yoy rise in
loan book to `91,932 cr. In line with it, AUMs also increased by 33%yoy in the
quarter. At the bottom line, the company’s net profit grew by 26%, aided by steady
growth of 25% in net interest income, a surge of 70% in other income and a
reduction in cost with respect to income, which decreased by 120 bps to 25.4%.

Outlook & Valuation: We expect the company to post a healthy loan book CAGR
of 28.5% over FY2017-20E, which is likely to translate in earnings CAGR of 28%,
over the same period. At the current level, the stock is valued at 1.8x FY2020E
ABV. We maintain BUY on the stock, and retain our target price of `740.

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