Dewan Housing Finance Reco: ACCUMULATE :: Emkay PDF link

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Company Update

Dewan Housing Finance Reco: ACCUMULATE CMP: Rs 253 Target Price: Rs 283 Capital infusion as expected ·      DHFL raises Rs3bn via QIP (1.3x/7.6x 1-yr forward standalone PB/PE) resulting in EPS dilution to the tune of 12% for FY12E. FY12/FY13 BV est. stands increased by 5%/3% respectively ·      Capital infusion to augment business growth. Expect 38% loan CAGR aided by improved economic sentiments, niche target audience and expectations of easing interest rates ·      Consolidation of FBHF with DHFL remains well on track. NHB regulations on uniform interest rates / withdrawal of pre-payment penalty clause have had minimal impact on growth ·      Immense growth potential with stable asset quality & return ratios reaffirms +ve stance. However, with FY12/FY13 cons. ABV at 1.3x/1.2x, upsides seem capped. Downgrade to ACCU.

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