Read through the entire thread again yesterday. Must compliment you on the way you’ve patiently answered each question with a lot of pertinent details about the company, business model, industry, etc.
So – I’m almost convinced about the management and it’s execution capability given it’s excellent track record and risk management capabilities.
Looking at some valuation metrics – apart from RoA – it looks like a good bet on all other parameters (RoE, Revenue growth, NIM, P/B, PEG, P/E).
But the RoA is currently around .95% which is poor when compared to other NBFCs (Gruh has a RoA of 2.2% – not a same industry comparison but then the valuations are accorded based on average/excellent numbers I think. And since it’s mortgages are always depreciating assets – RoA should be even better than average HFCs whose mortgages appreciate and are less risky). And I believe it has do with their high CAR and this has been documented in the thread about the company intending to grow faster.
Based on that – only if they start increasing the loan book growth aggressively (min 25% yoy for 3-4 years) should we expect a re-rating IMHO.
Disc – Invested (deliberating on increasing size of bet)
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