Centrum Broking
GIC Housing (Buy)
CMP: ₹303.60
Target: ₹370
GIC Housing Finance Ltd, was incorporated as ‘GIC Grih Vitta Ltd’ on December 12, 1989. The name was changed to its present name vide a fresh Certificate of Incorporation issued on November 16, 1993. The company was formed with the objective of entering in the field of direct lending to individuals and other corporates to accelerate the housing activities in India.
While the final notification on Government of India’s extended scope of Pradhan-Mantri Awas Yojana (PMAY), which aims at providing housing for all, is still awaited, our interaction with stakeholders has pointed to immense growth potential in the affordable housing space.
GICHF’s increasing focus on the low-income group (LIG) customer segment makes it the key beneficiary of the scheme, which would accelerate its growth further. This, coupled with the company’s diverse borrowing mix and limited asset quality risk, provides greater comfort. Capital position remains strong. Valuations at 1.5x FY19E ABV remain undemanding.
Risks: Lower-than-expected loan growth or higher pre-payments remain key risks.
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