Dewan Housing Finance Limited


(Hitesh Patel) #21

these are kind of cockroachy stocks. nothing visible but one doesnt know when something will come out.

unless u have bought at very very attractive near bottom prices, its difficult to be comfortable owning these stocks as compared to the biggies like gruh ,hdfc etc.


(Vinod MS) #22

Hi,

This could be the reason for the price going down. Citigroup bought 38 lac shares of DHFL at Rs 169 from IIFL INC.

Cheers

Vinod


(HG) #23

this one is really going down. Do bulk deals done at prices lower than market prices bring the price down to the lower level? Read an article that suggests something similar happening with Kajaria.


(Nelson) #24

Any body has any idea regarding the 10% spike today…if there is any new development please let us know…tried searching for it…but besides the approval for the merger there is no other trigger or positive news out there…


(HG) #25

The price is all over the place. Hopefully it can sustain past 215 to go to the next level 230-235.


(HG) #26

Can someone explain what the below means? Is this standard practice or is it something not in the interest of investors?

Dewan Housing Finance Corporation Limited has informed the Exchange that the Board of Directors of the Company at its meeting held on January 30, 2013 has considered the following: (1). Borrowings by way of Private Placement of Secured Debentures upto an amount not exceeding Rs 3000 crore, in one or more tranches (including an option to retain over subscription for issuance of additional NCDs, in such manner as the Board may at its sole discretion determine). (2). Borrowing by way of issue of Unsecured Redeemable Non. Convertible Subordinated Debentures (Tier II) upto an aggregate value of Rs 1,000 crore on private placement basis.


(Vinod MS) #27

Hi,

DHFL has come out with steady results.

9 month performance:

Disbursements up 37%, Loan book at 26000 Cr now.

Income up 37%, PAT up 20%

Net Interest Margin improves to 2.87% and Gross NPA decreases to 0.73% and NIL net NPA. Only 6% exposure to builders/projects.

The long awaited merger with FIrst Blue Home finance will happen in Q-4 as all court approvals have been obtained. As per my understanding currently DHFL has 11.73 Cr shares, the merger will add another 1.08 Cr shares.

The expected PAT for DHFL for FY13 with same growth exhibited in 9 months will be 365 Cr and if First Blue also grows as it has grown in 9 months PAT will be 121 Cr. EPS after the merger works out to Rs 38. Request others to cross check this.

When HDIL went down recently, as usual DHFL went downtemporarily and bounced back to 200+ levels. Kapil Wadhawan had to come on TV again to explain the family split has happened and they have nothing to do with HDIL :slight_smile:

The share holding pattern of the com shows good presence of institutions:

Caledonia PLC-8.5%, Government of Singapore - 3.5%, HSBC - 4.8%, Wellington Trust 2.2% etc Caledonia also has a nominee in the board.

I see DHFL as a good long term investment with management exhibiting steady growth with quality loan book.

Do have a look their investor presentation

http://www.dhfl.com/investors/financials/financial-results/

Cheers

Vinod


(Kuntal Sharma) #28

Thank you Vinod for the updates and looks like the patience of holding may finally be fruitful.

Hi,

9 month performance:

Link: http://www.dhfl.com/investors/financials/financial-results/

Cheers

Vinod


(Tarun Talwar) #29

They need to raise money periodically for lending, being a finance company. There is nothing to worry about here. In my last 10 years of watching and frequently owning this stock, I have seen that the promoters are good with minority shareholders.


(HG) #30

Thanks for the reply, Tarun. 10 years is quite a bit of time…can you elaborate on your experience with DHFL? Has it been a wealth creator for you?


(Tarun Talwar) #31

I have not owned the stock throughout this period and was in-out at various times.__I have some holdings currently. Overall, it has been a good stock, though not the best performing one. I started tracking it when it was below 50 rs and it has made a high of 400 at one point if I remember correctly. I was attracted by their business model of focus on smaller towns and small denomination loans which filled a necessary gap right at the beginning of last housing boom. The company has not disappointed and has grown consitently on all parameters. They also dilute equity frequently which seems necessary evil of a growing company in lending business. The promoters allot warrants/shares to themselves every few years to keep their holding between 35-45% which I like. As far as I remeber, they have been fair with minority guys. They have also been paying good and rising dividends. After the family split, the Dewan housing BS looks cleaner minus absence of Real estate and retail busines holdings. However, the stock has always been volatile. and I mean not due to HDIL connection. Even when there was no HDIL in markets, the stock was volatile. So I guess if you can handle this and be patient, this stock gives reasonable returns consitently.


(Hardtoget) #32

just cam across this realted to DEWAN


(HG) #33

@Tarun - thanks for the reply. I’m sort of undecided what to do about this one. I had bought this as a trading bet around 170 but as the results were/are promising I held on. The stock fluctuates quite a bit though…


(Nelson) #34

This query is for the senior boarders:

With corporate governance issues hanging over the company’s head plus the time involved in differentiating itself from HDIL and its management, is there not a high opportunity cost involved here. What I am getting at is we might have to wait for a substantially long period before the market realizes this and gives it a valuation accordingly.

Also I have heard rumours about corporate governance issues with the company in the past and how the promoters are unethical people who are not to be trusted. Can anyone list out the misdeeds or actions which prompt people to start such rumours. As an investor with limited experience one of the toughest things for me is to evaluate management quality. Can someone suggest a way to deal with this…


(Roopesh Kohad) #35

DHFL has forayed into Education Loan business through its sister company Avanse -http://articles.economictimes.indiatimes.com/2013-02-08/personal-finance/36993014_1_education-loan-loan-business-dhfl.

Though it be a small & side business for them and home loan remain their core business.

With recent incentive of 1 lakh rebate for first time home loan availers, DHFL would also benefit from it.

CRISIL has come out with their evaluation of DHFL giving fundamental grade of 4/5 and valuation grade of 5/5 with fair value of 284 -http://www.moneycontrol.com/news/crisil-research/dewan-housing-loan-book-growth-drives-profitability_830353.html

However, CRISIL had recommended same ratings almost an year back with 354 as target price when stock price was ruling at 245 - http://115.112.231.149/wp-content/uploads/2012/03/Dewan-Hsg-Fin_CRISIL_16-03-12.pdf


(Vinod MS) #36

Hi,

Results are out. FY13 EPS as expected is at Rs 38.47 a growth of 25%. At CMP of 180 trading at below 5 times P/E, should get re-rated to 6 times as usual.

Loan book up YoY by 33% to 33900 Cr. Disbursement growth at 18%.

Gross NPA 0.68%.

NIM is at 2.72%, CAR at 16.65%. ROE 18%.

Final dividend Rs 3, interim was Rs 2.

Cheers

Vinod

Discl: I had converted my entire DHFL holding to Canfin. Canfin looked like a better opportunity in the same sector.


(Roopesh Kohad) #37

DHFL Q1 results are out. PAT grows by 54% Y-o-Y.

Today DHFL acquires DLF’s 74% stake in DLF Pramerica Insurance


(stockpicker123) #38

DHFL is an interesting play in single asset class financing in India. Historical performance is out of the charts with 5 yr PAT growth of 40% and 5yr ROE of 18%. Its avg ticket size is <10L, it lends in tier 2/3 markets and credit quality is exceptional. It is well capitalized and has some of the best long only shareholders holding significant stakes. Still it trades at a measly 0.5x book, quite a mystery to me which I am struggling to decode… potential reasons that come to mind are:

  1. Under reporting of credit slippages

  2. Transactions with HDIL which are some how masked (although Kapil has denied any such business on TV)

  3. Linkage with HDIL as they are are cousins, albeit separated now

  4. Very opaque disclosures - no one knows the consideration, stake, future capital commitments etc for their DLF purchase, First blue merger was a complicated transaction to understand. Promoter group companies are involved in virtually every transaction

  5. Distracted promoter - always seems to be interested in acquisitions many of which do not strategically fit - including first blue and alleged attempt to buy a Private equity fund

  6. Poor communication - management decided to do away with analyst calls and there wasnt one for the full year FY13.

Hoping to get to the bottom of what looks like a great opportunity…


(Vivek Gautam) #39

Stockpicker123 Its a pleasure to read your sage comments.

Could you please give comments on Canfin Homes too where lot of valuepickers have stake n mostly at a high price?


(Austin DMello) #40

Hi,

Have been looking at DHFL for some time and share the concerns already talked about here, but at a given price I think it presents value … at about 0.47 book looks like concerns are beginning to get overshot and long term growth potential dismissed. Interesting story at these levels and as price corrects even further…