Broker's call

| Updated on January 12, 2018 Published on January 12, 2017

Anand Rathi

DHFL (Buy)

CMP: ₹266.85

Target: ₹374

Founded in 1984, Dewan Housing Finance (DHFL) is a dominant player in niche markets (Tier 2 & 3 cities) with strong foothold in the limited competition low- and middle-income (LMI) segment. The company has emerged as a one-stop-shop for its customers’ financial needs, extending beyond home loans. Post-acquisition and merger of First Blue Home Finance, it now caters to the middle- and upper-middle income group too. The company also has a presence in education loans segment (Avanse Education Loans) and life insurance segment.

It is India’s fourth largest private sector housing finance company with AUM of ₹75,220 crore as on Q2 FY17. The company has a well-diversified loan book with housing loans (70 per cent), loan against property (16 per cent), project loans (11 per cent) and SME (3 per cent) on Q2 FY17. It has the lowest proportion of home loan portfolio compared to its peers.

Given the healthy growth in loan book, improving NIM on account of change in borrowing mix, improving cost efficiency and stable asset quality depict a positive outlook for DHFL.

Published on January 12, 2017
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