On the operational front, persistent challenges in the real estate segment (developer finance/LAP), liquidity tightness (accessibility and cost) and soft disbursements along with rundown in CRE book are likely to lead to sharp contraction in on-book AUM. These cumulatively are likely to further pressurise earnings. Hence, we are revising down FY20/21E EPS 26%/34% and P/BV to 0.8x (from 1.25x), leading to revised TP of INR267(INR527 earlier). Maintain ‘HOLD’.
Considering, Low mortgage penetration, favorable demographics and increasing affordability, combined with the government and regulatory push, the housing finance industry is expected to deliver good growth ahead. We value the stock at an estimated P/BV of FY20Est. at 2.25x with a target of ` 980 in medium term.