GRUH Finance - mini HDFC


(Gyanendra46) #463

When the bonus quantity will reflect in the demat?. Share Price has been reduce but no of share still showing previous no.


(AvinashMb) #464

Check with your demat account provider. Rules say that you need to deposit in 21 days. But a few folks have already got it. Am yet to get it . I use ICICIDirect.


(Multiplier777) #465

Latest interview of Rakesh Jhunjhunwala on CNBC.

‘People are underestimating the impact of Affordable Housing on India in general and the subsidy the Govt is providing. In 2018-19, we are going to cumulatively build 3 times the houses we built in 2016-17 and 2017-18. Sector is ripe for good times ahead in the next two to three years’.

I tend to agree with him. The best for Affordable Housing is yet to come in the next few years.

(4th minute on the attached video)


(ranjan rakshit) #466

Hi @Rajesh1975 , I am able to understand till the Fair Value part i.e Rs 664 but not able to understand the part “Total Dividend to be received today comes Rs 59” . How to calculate the same ? Can you please help?

As per my calculation it is coming Rs 25.24 after considering Cost of capital 15% for 12 years

image


(Multiplier777) #467

Another steady quarter from Gruh. PAT (YoY) grows by 20%.

If you apply the rule of 72, you should double your money in 3 1/2 years in Gruh (assuming PE remains same & they continue to grow at 20% p.a.). On top of that, you get dividends which grow each year.

I feel the growth rate will gradually pick up to above 20% as supply of affordable houses increases and PMAY awareness picks up speed. Nevertheless, even a 20% growth is great with NPA in total control.June 2018.pdf (480.6 KB)
Press Release July 2018.pdf (744.4 KB)


(zulfiqar) #468

Any reason y disbursement is muted just 2% this quarter


(RPA1700) #469

Rev Inc 12% cyq-pyq
Pat Inc 20% cyq-pyq
Loan book Inc by Rs. 2192 crs cyq-pyq
Provision for expected credit loss is Rs. 3.77 crs vis a vis rs. 11.29 cr in the same qtr of last yr


(RPA1700) #470

June 2018.pdf (480.6 KB)


(AvinashMb) #471

Good results but no management commentary yet on how things on the ground are improving fro affordable homes. There have been good launched in Bangalore around this theme , not sure if this is a national trend. During one of the interviews they had mentioned FY19 is when the supply will come into the market.


#472

(Multiplier777) #473

Key take away from the above interview:

  1. Continue to focus on 20%+ loan book growth; confident of achieving it

  2. Last year same quarter, disbursement growth was high at 30%+ post demonetization stabilization & pre GST implementation. Thus YoY this year is low due to a higher base.

  3. Credit quality is under control

  4. Housing supply remains a challenge. Hopefully, the supply side should improve in the next few quarters and growth should pick up further

Gruh continues to be amongst my favourite4 which any stock portfolio must have to bring stability and a good nights sleep. The others being:

Page
HDFC Bank
Asian Paints

This year should provide ample entry opportunities into these and it may be a good idea to nibble into these on corrections. In my view, these are multi year hold stocks & holding them will test your patience as during your long holding period, there may be times when your other portfolio of small/mid cap stocks may be jumping up at break neck speed.

Some interesting quotes:

George Soros: "If investing is entertaining, if you’re having fun, you’re probably not making any money. Good investing is boring.

Paul Samuelson: Investing should be more like watching paint dry or watching grass grow. If you want excitement, take $800 and go to Las Vegas


(Rajesh) #474

Gruh Discounted Dividend.xlsx (11.1 KB)

In my opinion you have done some mistake while puting figures at year 1 and 2. Also I have taken into account year 0 as this was already December 17.
How you have discounted, it is not clear as it is not excel sheet. Please check attachment. You can check formula to arrive at conclusion how I discounted it.


(ranjan rakshit) #475

Thanks a lot @Rajesh1975 for clearing the doubts. :slightly_smiling_face:
In which type of business we should prefer this valuation Model ? To me where we have long term growth visibility like Hdfc bank, Asian Paints etc. Please correct if I am wrong.
Why we are considering here 10-12 years of time frame not 5-6 years time frame ? Can you please guide about this valuation model bit? It will be really helpful.


(Rajesh) #476

Yes you are right about the selection of businesses. Profit growth certainty and longevity of profit growth is always discounted in price. These businesses are never cheap unless facing problems. These should be kept in core portfolio forever unless they lose moat. This is my philosophy.
Why 12 years not 5-6 years
Simple, No body can predict short term. Stock price is too high, If anything happens on GDP growth front in US, worldvide markets will crash. Stocks like Gruh will also come down or will remain here for next 4-5 years, no body knows. People are too bullish for great companies. So discounting 10-12 years give consolation for people who are invested. After all market is the game of probabilities. Discounting for next 12 years for a finance company may backfire heavily if it happens like East Asian crisis, who knows ? I admit that I am subjective here, I dont see much value in next 4-5 years so I discounted for next 12 years.


(Multiplier777) #477

Motilal Oswal Real Estate arm raises Rs 575 cr for its latest fund. Majority of funds to be used to develop affordable residential real estate.

Waiting for Gruh’s growth to escalate gradually as supply of affordable housing increases…


#478

why would motilal give biz to Gruh finance? developer funding is margin kicker for HFCs and important to grow home loan biz by tapping captive clients.


(Multiplier777) #479

The real estate fund would provide loans to developers for their affordable housing projects. I have my doubts if Motilal Oswal can force all customers of the developer to take housing loans only from Aspire (MO’s HFC) and not from any other HFC.


#480

Sure, even Aspire won’t take 100% of clients but I have seen SBI HFC financing upto 50% of clients in a mid size project (~400 flats). Basically, HFC biz in big towns/cities is largely a commodity biz and quick turnaround becomes an advantage which Aspire will enjoy due to better access to info.


(Multiplier777) #481

Yes. Agree. Aspire will have some advantage on this count.

However, my broader point was that supply of affordable housing has been a problem which is slowly getting rectified (MO real estate fund raise is just a small data point in the overall improving environment).

Hopefully, disbursement growth should start improving from present levels (my interest is in Gruh).

I am however very vary of some HFCs growing their book by 40%-50% p.a. and being cheered from the sidelines by their investors. Many will stumble as Aspire has clearly shown that the lending business is not about giving out loans at a fast pace but making sure you collect your EMI’s and on time.

Many HFC’s/banks are forced to grow their asset book at a fast pace to hide their NPA’s (denominator goes up so % NPA’s appear under control).


(MD RH) #482

Guys ,all of us will come to know that why gruh quote at hefty valuation in next coming days . Why Gruh is different from Indiabulls Housing and Dewan Housing? Why we cannot compare any xyz company with with this time tested gem?In bull market we always complained about the gruh’s hefty valuation . Now we will know another part of stock investment , not only making money , all of us need to learn also how to keep the gain with us…the gain which we made last 4 years…No Excel expert can do this justification with any model …