**IndiaBulls Housing Finance** – Q4 FY20 (Cons - Audited)
CMP – 230
Total Income from ops at 2,901 Crs
4,300 Crs YoY (-32.52%) 3,301 Crs (-12.13%) QoQ
Year ending Income: 13,201 Cr vs. 17,200 Cr (-23.25%)
Net Profit of 100.2 Cr
1,001 Cr YoY (-90.12%) 500.1 Crs (-80.17%) QoQ
Year ending NP: 2,101 Cr Vs. 4,002 Crs (-47.58%)
EPS (in Rs.) 3.27
23.54 YoY | 12.90 QoQ
Year ending EPS: 51.69 Vs. 95.26
View: Result is below expectation. YoY and QoQ total income declined and profit declined significantly due to impairment losses in the tune of INR 501 Cr in this quarter and Covid – 19 provision of INR 700 Cr in this quarter.
**Business Highlights & Updates**
Interest Income for the Q4FY20 is around INR 2,401 Cr Vs. 3,601 Cr in Q4FY 19 Vs. 2,670 Cr in Q3FY20. Therefore declined by 33% in YoY and 10.1% in QoQ.
Interest income for the FY20 is around INR 11,500 Cr Vs. 14,801 Cr in FY19 therefore declined by 22.3% in YoY.
Finance cost for the Q4FY20 is around INR 2100 Cr Vs. 2,374 Cr in Q4FY19 Vs. 2,050 Cr in Q3FY20. Therefore declined by 11.5% in YoY and marginally up by 2.3% in QoQ.
Loan book as of March 2020 is INR 69,676 Cr Vs. 91,530 Cr as of March 2019 therefore declined by 23.9%.
Loan Book as of Q4FY20 is around INR 69,676 Cr Vs. 78,253 Cr in Q3FY20 therefore declined by 10.9% in QoQ. Total provision 5.4% Vs. 2.0% in Q4FY20 Vs. Q3FY20.
Total Provisions of INR 3,741 Cr on Balance Sheet representing 218% of GNPAs. Extra Provisions on Balance Sheet of INR 2,391 Cr representing 3.4% of Loan Book.
GNPA Ratio in Q4FY20 1.84% Vs. 1.94% in Q3FY20. Q4FY20 GNPA is around INR 1,712 Cr Vs. 1,988 Cr in Q3FY20
Bank Loan as of March 2020 is INR 33,570 Cr Vs. 46,100 Cr as of March 2019 therefore declined by 27.1% in YoY. NCD as of March 2020 is INR 37,305 Cr Vs. 48,739 Cr as of March 2019 therefore declined by 23.5% in YoY. ECB as of March 2020 is INR 5,146 Cr Vs. 4,819 Cr as of March 2019 therefore declined by 6.8% in YoY.
**Financial**
ROE and ROA is around 18% and 1.9% respectively, Capital Adequacy ratio 27.09%. Book value per share is around INR 383 and share is currently trading at 0.6x of its book value. Company is currently trading at annualized PE of around 4.5 which is fair as per Industry benchmark. Promoter holding in the company is around 23.1% which is increased by more than 1.3% in QoQ. FIIs, mutual fund and Insurance cos hold around 37.8%. 0.6% and 10.8% respectively and **FIIs decreased their stake around 9.4%** in this quarter. Cash & Cash equivalent as of FY20 is around INR 13,410 Cr.
Share price high 745 (52 week) and now 230 more than 70% corrected from their peak. Indiabulls Housing Finance Limited is a mortgage lender. It is India's second largest housing finance company and is regulated by the National Housing Bank.
Share support price is INR 180. Trader can continue with the company based on their risk appetite.
Opportunities: Share corrected more than 70% from their peak due to NBFC overall sector stress and Covid – 19 impact businesses got drastically impacted. Company has paid around dividend INR 21 for this FY 20 around 10% of current yield of CMP. Company long term credit rating is AA notified by various credit agencies. Series of structural reforms by the government, the residential real estate market appears to be at an advantageous position and may be emerge as compared to the 2007-08 Global Financial Crisis. More tax benefits for developers as well as buyers introduced by the government in the last 4-5 years. Company said it has comfortable liquidity to pay up maturing bonds and loans in the coming quarter and it planned to raise more than Rs. 2,000 crores in a share sale, joining the band of financial companies such as Bajaj Finance, Axis Bank and others in raising equity buffer.
Risk: Due to Covid-19 pandemic NBFC Company heavily corrected due to loan moratorium and also recovery is yet to be ascertained. Operating profit fell more than 90 percent as the company sold down loans to raise liquidity as financial markets and banks turned wary of funding shadow bans. Company has provided Rs 3741 crore, nearly Rs 700 crore out of which were set aside as Covid related provisions. It also made additional provisions of Rs 1798 crore, from the profits it received on sale of its investments in OakNorth Bank. It’s gross non-performing loan ratio was 1.84%.Its total comprehensive income after tax was a loss of Rs. 64 crores in the March quarter compared with a profit of Rs. 949 crores a year ago
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