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

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

 

DHFL

 

dhfl only

 

I will bet on DHFL

 

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

 

Gruh for me. Always has been so

 

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

 

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.

 

Excellent results posted by DHFL today.....

 

100% Agreed. I am holding in portfolio for long. I also have Repco and PNB Housing

 

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.

 

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).