DHFL has been able to achieve a steady and significant
growth in its AUM by focusing on relatively smaller towns
and cities where competition is less.
DHFL witnessed a CAGR growth of 47% in its AUM over FY11-FY14 and is targeting to double its AUM by FY17E (to reach `1,00,000 crore) by increasing its presence across the country and setting up branches in the untapped LMI markets. Moreover, we believe that increase in disposable
income in smaller cities in the country will drive growth in the housing sector, thereby increasing the demand for
Going forward, with an improvement in operating performance, the return ratios are set to improve. At the CMP (current market price), the stock is trading at 1.1x and 0.95x FY15E and FY16E BVPS and 6.95x and 5.8x FY15E and FY16E EPS, respectively, which is attractive and at significant discount to its peers.