CD EQUISEARCH
GIC Housing (Buy)
CMP: ₹335.15
Target: ₹431
Schemes such as ‘Housing for All by 2022’, Smart Cities Mission and launch of AMRUT would doubtlessly boost growth of housing finance industry.
The main focus will be on the slum redevelopment. Smart cities will require huge investment in infrastructure and real estate which will change the urban landscape and make Indian cities more liveable and affordable.
To keep pace with the competition around, GICHFL managed to start off well in the year with a loan book growth of 19.2 per cent achieved in Q1FY17 yo-y.
Despite continuous foreclosures, the company is able to sustain the growth in the portfolio. The disbursement in the last quarter leaped 15.3 per cent to ₹626 crore ($94.1m) as against ₹543 crore ($81.6m) in Q1FY16, and demand across the country assures escalation in the disbursement figures in the coming quarters.
GICHFL’s high margin yielding LAP (loan against property) portfolio is expected to resuscitate its fortunes. Rendering to middle and lower income class group,
GICHFL unquestionably faces risk of rising stressed assets. Nevertheless, hefty growth in the loan book reinforced by marginal rise in NIMs would culminate in over 20 per cent growth in earnings over the next two years.
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