Gruh finance or DHFL which one is best for next 3 to 5 yeats time horizon

Discussion in 'Ask A Query About Your Stock Picks And Portfolio' started by Anas, Jun 23, 2017.

  1. Anas

    Anas New Member

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    Gruh finance or DHFL which one is best for next 5 years
     
  2. kharb

    kharb Well-Known Member

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    DHFL
     
  3. shubham

    shubham Member

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    dhfl only
     
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  4. Ravikumar

    Ravikumar Active Member

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    I will bet on DHFL
     
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  5. w4wealth

    w4wealth Well-Known Member

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    dhfl is mainly into affordable housing. and also it is 2 nd largest HFC. so dhfl is better i think.
     
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  6. starry_eyes

    starry_eyes Member

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    Gruh for me. Always has been so
     
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  7. Kritesh Abhishek

    Kritesh Abhishek Member

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    DHFL for me. The company has good consistent profit growth of 36.88% over 5 years
     
  8. Ravikumar

    Ravikumar Active Member

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    DHFL is better than Gruh Finance in terms of valuations. It is performing better and have very good fundamentals. Rakesh jhunjhunwala has good stake in DHFL and invested for very long time.
     
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  9. Ravikumar

    Ravikumar Active Member

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    Excellent results posted by DHFL today.....
     
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  10. Srouta Mukherjee

    Srouta Mukherjee Well-Known Member

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    100% Agreed. I am holding in portfolio for long. I also have Repco and PNB Housing :)
     
  11. shakti khanduri

    shakti khanduri Active Member

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    Many members have recommended DHFL over GRUH as long term bet, but no body has given the reasons.Kindly you ,being the senior member, explain the rationale.
     
  12. Ravikumar

    Ravikumar Active Member

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    Motilal Oswal's research report on Dewan Housing Finance


    Dewan Housing Finance’s (DEWH) 1QFY18 PAT grew 29% YoY to INR2.61b. Strong AUM growth, YoY reduction in C/I ratio and continued decline in cost of funds were key highlights of the quarter. Disbursement growth of 33% YoY, the strongest in 13 quarters, led to AUM growth of 5.6% QoQ/22.5% YoY in the quarter. We expect DEWH to maintain this growth rate, given the large untapped opportunity and the sufficient capital it has to support this growth. Loan mix was largely unchanged, though there was a 70bp sequential increase in the share of builder loans. We expect the share of builder loans to continue increasing at this pace for the remainder of the year, post which it should remain stable. The liability mix was largely stable sequentially. Reduction in cost of funds continues (12bp QoQ), albeit at a slower pace than in the past few quarters. Opex grew 15% YoY to INR1.6b, resulting in 280bp reduction in the calculated C/I ratio to 25.3%. We expect prudent cost rationalization to continue over the next 2-3 years. This would be the key driver for strong PAT growth over the medium term, in our view. Asset quality was stable. However, credit costs increased 84% YoY to INR830m.

    Outlook

    DEWH continues capitalizing on its mortgage lending expertise in an underpenetrated market. Its focuses on being a core mortgage finance player, as evident from its divestment of non-core assets (such as the life insurance business). Also, with management’s commitment toward lowering operating cost, we believe the company has enough room to reduce its C/I ratio by 200-300bp over the next few years. We believe its gradual transformation to a core mortgage player with strong growth and healthy return ratios would result in further re-rating. We upgrade FY18/19 EPS estimates by 2%/4% to factor in stronger revenue growth. Buy with a TP of INR630 (2.0x FY19E BVPS).
     
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