Sharekhan
Target: ₹1,050
CMP: ₹898.00
We believe the company is likely to sustain an ~18% RoE in the near to medium term with growth gradually picking up from here on. Most internal systems and processes have been streamlined thus focus now is on accelerating the growth. Moreover, an additional three crore houses construction under PMAY scheme is potentially positive.
The company is guiding for loan growth of about 15 per cent in FY25 and 18-20 per cent from FY26 onward. Asset quality trends are expected to remain stable and credit cost to moderate going forward. Earnings growth is expected to improve as growth picks up given that most internal systems and processes have been streamlined thus focus now is on accelerating the growth. Moreover, an additional three crore houses construction under PMAY scheme is potentially positive.
The company has successfully demonstrated its ability to maintain its pristine asset quality in the past cycles. Outlook on asset quality remains stable.
Stock trades at 2.3x/2.0x its FY2025E/FY2026E ABV estimates. We maintain Buy rating with a revised PT of ₹1,050.
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.