Indiabulls Housing Finance Research Report By Motilal Oswal

Valuation and view: IHFL has transformed from a diversified lender to a focused mortgage player. Mortgage focus has yielded returns, with RoE/RoA improving from 3%/0.8% in FY09 to 30.8%/4% in FY15. Focus on mortgage and market share gains will drive AUM growth of ~23% for the next three years. Lowest levered HFC (5.9x) to support growth without dilution. Asset quality trend to remain stable. Improved borrowing profile, better credit rating and liquidity buffer will aid the company maintain healthy spreads. IHFL offers superior return ratios with +6% dividend yields. Maintain Buy with a target price of INR753 (3x FY17E BV).

(Login to download report)