DHFL came out with yet another quarter of good results. AUM growth of 23% and PAT growth of 29.5% was in line with expectations.Stable credit cost and ability to hold on to strong NIM were the key highlights of the quarter.

DHFL received Rs1,969 cr, via selling its 50% stake in its life insurance business, thus boosting its CAR by ~400 bps. With 18.7% CAR we believe the HFC is well capitalized to grow its book by ~23% over next two years, leading to 30% growth in PAT. At the current levels the stock is valued at 1.5x FY2019E ABV. We maintain BUY on the stock with a target price of Rs550.

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