Hi Hitesh,
NR prices are sliding down further… Very positive signs for CEAT and JK… Btw… not able to pick one among JK and CEAT… Which do you think has more potential from here on… Most of the brokerages have given higher targets for CEAT than JK… Not sure in detail though…
Hi Dhwanil,
No surprise in Narmada’s results… Flat results in all prospects … What about its immediate prospects for the next two quarters???
Hi,
Yes, the nos are below expectations but we should give it a qtr more to judge. On the positive, the valuations are cheap and downside seems limited.
Hi,
DHFL (Dewan housing) looks interesting to me. They are having a portfolio approach to lending where different subsidiaries cater to different customer niches differentiated on the price of the dwelling unit. It concentrates on Tier 2, and 3 areas where the competition is not that intense. They have a pan India presence. It is a dominant player in the low and middle income group. It also has tie ups with various banks like Yes bank, UBI, CBI, Pun & Sind Bank. It also cross sells insurance to its customers besides offering technical consultancy and management to developers and self construction clients in Tier 2 and Tier 3 locations.
Due to the sentimental effects of not defaulting on a home loan for fear of losing one’s home, the defaults are few and this reflects in the asset quality with net NPAs of 0.13% at the end of Q1 FY 2013. The NIMs are stable and are usually around 2.8% mark. ROE has hovered around 20% for the last 3 to 4 years. ROA is around 2%.
Borrowing costs have moved up in the last year at 10.85% due to the monetary policy adopted in line with inflationary pressures. The provisioning coverage is at 106.1%
CAR as of Q1 is 17.58% while Tier 1 ratio stands at 13%.
The company is also in the process of acquiring First blue home finance which caters to upper mid-income customers as opposed to the traditional clientele of low to mid income customers served by DHFL. So it offers lending at different price points/average ticket sizes thus comprising a full service offering across income spectrum.
Further details can be found here:
CRISIL report:
http://www.moneycontrol.com/mccode/news/article/article_pdf.php?autono=739908&num=0
Q1 FY 13 results:
http://www.dhfl.com/wp-content/uploads/2012/07/DHFL-Group-Earnings-Update-Q1FY13.pdf
Also did a relative peer comparison with LIC HF:
Total assets of LIC HF: 53552 crores vs 18985 of DHFL
Market Cap of LIC HF: 12028 crores vs 1927 crores for DHFL
I know this is very simplistic and requires further digging and analysis. This is where I request the experienced boarders to comment on the suggestion. IMHO this could also qualify for a longer term holding stock because the market size is huge particular in the Tier 2 and 3 locations of India. Awaiting your replies…
