GRUH Finance Ltd. share price target

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7 January 2019 Post amalgamation, Bandhan will have strong presence in the affordable housing segment. This will also help Bandhan to increase its reach in the western region. Promoter shareholding of Bandhan will fall to 61% v/s 82.3% as of now. This will take Bandhan a step closer to fulfil the 40% promoter shareholding requirement. The biggest advantage for GRHF is access to a stable source of funding and ability to expand its presence in the eastern region on the back of Bandhans branch network. HDFC Ltd will become the largest shareholder (Post Promoter) of Bandhan with ~15% shareholding. According to regulations, HDFC Ltd can a maximum hold 9.9% in any banking entity, subject to regulatory approval, and hence, we expect at least ~5% stake sale in future from HDFC Ltd in Bandhan (~INR40b based on combined MCAP of INR806b).

GRUH primarily provides home loans to individuals and families, especially in the lower-income group in the rural and semi-urban areas, for purchase, construction, extension, repair and renovation. NII increased at a modest pace of 9% YoY in Q2FY19 mainly due to 27 bps Asset quality continues to remain broadly stable as Gross NPA ratio increased marginally by 2 bps QoQ (21 bps YoY) to 0.9% as of Q2FY19. We project Gross/Net NPA ratios at 1.0%/0.5% by FY20E. Though we like GRUH in the HFCs space, the current stock price has...

6 November 2018 GRUH Finance (GRHF) reported 2QFY19 PAT of INR1.06b, up 20% YoY (8% miss compared to our estimate of INR1.14b). While net interest income was largely in line, higher-than-expected operating expenses drove the PAT miss. Disbursements for the quarter picked up smartly on a QoQ basis from INR12b to INR15b. Annualized repayment rate, too, has moderated from 25% in 2QFY18 to 21% this quarter. Loan growth was in line with prior quarters at 4% QoQ/ 17% YoY. The company continues to slow down on LAP growth in LAP has been sub- 10% YoY for the second consecutive quarter. Borrowings grew 14% QoQ in order to maintain liquidity on the balance sheet. CoF for the quarter was up only 10bp sequentially to 7.5%. It has been range-bound at 7.4-7.6% for the past 5-6 quarters.

GRUH Finance Ltd Q2FY19 results Comment Operating Income grew by 6.27% to Rs. 480.54 Cr in Q2FY19 when compared to the previous quarter. Also, it rose by 15.45% when compared with Q2FY18.

Operating Income fell by 6.63% to Rs. 452.19 Cr in Q1FY19 when compared to the previous quarter. GRUH Finance Ltd Q1FY19 results Comment

GRUH Finance Ltd Q4FY18 results comment Operating Income increased by 13.03% to Rs. 484.31 Cr in Q4FY18 when compared to the previous quarter.

GRUH Finance (GRHF) reported strong 4QFY18 results, with continued high-teens loan growth, an improvement in margins and lower-than-expected operating expenses. However, higher tax expenses drove in-line PAT. Disbursements were up 20% YoY to INR15.1b for the quarter and up 28% YoY for the full year. Disbursement growth in the quarter was driven by home loans (+24% YoY) and developer loans (+33% YoY). Loan growth came in at 18% YoY/5% QoQ. The loan book stands at INR156b.Growth in the LAP book continues to decline (+13% YoY), while the NRP loan book continues to de-grow (-9% YoY).

GRUH primarily provides home loans to individuals and families, especially in the lower-income group in the rural and semi-urban areas, for purchase, construction, extension, repair and renovation....

GRUH Finance Ltd Q3FY18 results comment Operating Income grew by 3.48% to Rs. 428.47 Cr in Q3FY18 when compared to the previous quarter.

Gruh Finance's (GRHF) PAT rose 28.3% YoY to INR822m (in-line) in 3QFY18.The quarter was characterized by a strong pick-up in disbursement growth(due to a lower base), stable margins and good asset quality. Loan growth was in line with trend at 18% YoY, driven by retail home loans.However, disbursement growth was robust at 37% YoY - a pleasant surprise - led by home loans and LAP. Developer loan disbursements were largely in line with trend. Interestingly, GRHF was able to sustain yields at 11.8% (same for the past three quarters), despite a very competitive environment. Cost of funds witnessed a minor uptick (+7bp QoQ), mainly due to a rise in GSec yields.

Operating Income grew by 4.0% to Rs. 414.05 Cr in Q2FY18 when compared to the previous quarter Operating Income grew by 4.0% to Rs. 414.05 Cr in Q2FY18 when compared to the previous quarter

Gruh Finance (GRHF) reported PAT of INR778m (4% above our estimate) for 2QFY18, largely driven by lower-than-expected operating expenses. Opex growth slowed down to 11% YoY, resulting in 300bp YoY reduction in C/I ratio to 17.6%. In FY17, the company had incurred significant lagged expenses of branches opened in FY16, which will not recur this year. Loan growth was in line with trend at 18% YoY, driven by retail home loans. However, disbursement growth was robust at 28% YoY (in line with 1QFY18 performance). While the management expects ~30% disbursement growth in...

Operating Income fell by 4.32% to Rs. 398.12 Cr in Q1FY18 when compared to the previous quarter Operating Income fell by 4.32% to Rs. 398.12 Cr in Q1FY18 when compared to the previous quarter

Operating Income rose by 9.21% to Rs. 416.11 Cr in Q4FY17 when compared to the previous quarter.

Gruh Finance reported healthy 20% growth in the net profit to Rs 60.18 crore for the quarter ended June 2016 over Q1FY2016. The company has also recorded healthy 22% increase in the disbursements. The loan book of the company continued to expand at steady and strong pace of 24% at end June 2016.

Gruh Finance (GRHF) reported PAT of INR601m (up 19.6% YoY) for 1QFY17. While its operating performance was in line with expectations, higher provisions led to a 3% PAT miss. Key highlights of the quarter were loan growth of 24% YoY, seasonal...

Gruh Finance Ltd provides financial services mainly for rural housing, construction/upgradation of dwelling units and to developers. Gruh is largely focused on the affordable housing loan segment in western India; its average loan size is ~8 lakh. It has a diversified client mix, with a little over 60% of loans given to employees. The company has penetrated over 90% talukas in Maharashtra and Gujarat and is now looking to replicate this penetration in other markets as well.