GRUH Finance - mini HDFC

(Rudra Chowdhury) #302

Gruh is optically rich. As and when management decides to dilute at this high P/B it will become cheap at one go! So might not come down in a hurry.

(Yatharth) #303

One thing I have noticed is that Gruh management has been conservative, by and large, in their forecasts. The company has given almost 45% CAGR in the last 5 years without much media/TV hype. Still growing consistently.
Discl:: 9% of portfolio. It deserves more but I am a chicken when it is in the lower band and start comparing its PE or PBV and miss out.

(Rajesh) #304

Its a long debate on this thread that equity dilution will reduce P/B. I think its hypothetical. Gruh ROE is 30%+. Why will Gruh dilute equity when it can grow at 30%+ without dilution. High loan growth rates will turn some loan assets non performing later. Markets love any growth 20%+ if it is consistent and assign good valuation. If ROE falls in future, Gruh will need to dilute to grow, that time it would not have this much P/E, P/B to dilute at high price. I believe it is a real and safe “Ek lakh karod kee kahaani”.
Motilal research report on valuation says,
"We value GRHF based on residual income model assuming earnings CAGR of
18% by FY35E, Rf=7.71%, β=0.65, risk premium of 5% and terminal growth rate
of 5.5%. We expect GRHF’s net profit to grow at CAGR of 26% over FY16-18E
and RoEs to touch ~33% by FY18E."

(jugal mansharamani) #305

(us121) #306

Investor Presentation Link:

Few points:
Most of the important Ratios in order or improving.

LAP Retail loan growth forcefully truncated:

NIM Improving:

Affordable Housing Segment is picking up:

(Kritesh Abhishek) #307

Gruh Finance has reported 20 percent rise in its Q1 net profit at Rs 72.2 crore versus Rs 60.18 crore.The company’s total income was up 14 percent at Rs 398.12 crore versus Rs 346.34 crore.

Aggregate NPAs of the company was at 0.64 percent of the loan assets as on June 30, 2017 as against 0.56 percent as on June 30 2016 and the net NPAs was at 0.16 percent against 0.27 percent.

Read more here:

(jshah17umd) #308

GRUH has given substantial loans under CLSS.

What impact will it have if there is a policy change and govt decides to discontinue subsidy 3-4 years down the line ?

It will be nice to know if GRUH has changed its appraisal model.
Are they looking if the customer can pay EMI with the subsidy ? OR the customer has ability to pay EMI even without subsidy. ?


Gruh finance is trading at a market cap that is much higher than its loan book size. Can anyone throw some light on how can this be (even with its strong parentage, management etc considered)?

(Multiplier777) #310

Gruh gets its high valuations due to consistent growth, strong visibility, excellent management of risk. And last but not the least, despite it being in the lending business, it has not (at least in the last 7-10 years) and probably will never need to raise equity for its growth. Most, if not all, in the lending business have to go to the market with a begging bowl every few years to raise equity.

(zulfiqar) #311

It is only company in the lending business that success fully lent to rural areas, in AR they always mentioned market so large

(s) #312

As per my understanding they might be borrowing some money from parent but also do NCD for raising capital to lend. It has strong parentage of HDFC which helps for their rating and management rating. They do get some incentive from NHB which is passed on to customer and NHB also refinances some portion of the loan in this segment. And now the new PMAY incentives to purchase of houses under 15 lakh. focused on low cost & self employed in rural segment. Gruh is strong in this space but will it be able to maintain its superiority as now the flood gates are opened as per NHB over 70 registered HFC and there will be focus on this segment because of PMAY scheme but Gruh has an early bird advantage. They have never diluted equity and have created massive wealth for investor but future is full of opportunities and challenges. All in all a Horse for the long raceGruh Finance.pdf (1.3 MB)

(Srinivasan Sundaram) #313

Gruh Q2 results announced

EPS growth of 22 %

(jirohit) #314

actually EPS growth is for first half FY18, if you check quaterly trend, YOY EPS growth is 25%.

(Srinivasan Sundaram) #315

Yes. with higher provision 134 % compared to H1 of 2017…If not could have been even more

(Sandeep Patel) #316

Q2FY18 and H1FY18 results… Steady march forward, as always…

Good YoY disbursement growth. Higher repayments means lower loan assets growth compared to disbursement growth. Seems result of increased competition.


(kanvgarg123) #317

Disbursement is 2483 crores. Check out NSE corporate announcements for the data.

(Sandeep Patel) #318

Thanks. Added NSE link (somehow I could not find this info on BSE yet) and updated disbursement details in the previous post. Cheers.

(kanvgarg123) #319

Cheers! Thanks for constantly posting the numbers :slight_smile:


(arpitjain512) #320

Whats the current take on this stock. I donot hold any hfc as of now. Can I enter into Gruh finance at cmp or on dips for longterm probably > 5 years ?

(Susindar) #321

With Dewan Housing comfortably beating Gruh in almost all parameters for a couple of quarters now, does this stock still justify a premium to that of Dewan. Currently this stock is valued higher than Dewan while the quarterly profit is about 1/4th of Dewan.