GIC Housing Finance Initiating Coverage Report By IndiaNivesh

We continue to prefer Housing Finance stocks over Asset financing and Infra Financing NBFCs as housing finance segment remains unaffected both on growth as well as on asset quality front. We believe GICHSG is likely to be next candidate for re-rating due to reasons stated above. Although the growth for closest peers is high compared to GICHSG but we believe average valuation gap of 53% (excl. HDFC and Gruh) is ignoring the positives of GICHSG. At CMP of Rs 211, GICHSG is trading at P/ABV of 1.5x and 1.3x for FY17E and FY18E respectively. We initiate coverage on GICHSG with buy rating and target price of Rs 265, valuing it at 1.6x FY18E ABV.

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