Pick of the week : GIC Housing Finance

by khalid on 23/02/2011 · 0 comments

Brokerage house JRG Capital has recommended GIC Housing Finance Limited (GICHF) as “Pick of the week”. The firm recommended “Accumulate” on the stock with the target price of Rs 144.

GIC Housing Finance Limited (GICHF) is a subsidiary of General Insurance Corporation of India (GIC) and was formed with a prime focus to provide Finance for Housing. The Company provides loans to Individuals and to Persons/Entities engaged in construction of houses/flats for residential purposes. GIC has presence in 27 locations across the country and has tie-ups with Constructors to offer finance to people.

The company has disbursed Rs 7.23 billion worth of loans in 3 quarters of the current fiscal and management is confident of crossing Rs 10 billion in terms of disbursal by year end. The said that “We maintain our Disbursal growth Target for FY 11E and FY 12E at Rs 9.86 billion and 12.64 billion respectively, recording a CAGR of more than around 36% between FY 10-12”.

Following the numbers in Q3 and 9M of FY11, we have reduced our Top-line estimates for FY 11E and FY 12E by 6.1% and 7.4% respectively. We now expect GIC`s Operating Income to grow at a CAGR of 19.1% to 4.18 billion (FY 12E) meanwhile the EBITDA is seen clocking a CAGR of over 15% to Rs 1.22 billion (FY 12E). At the Trailing market price, GIC is trading at 6.1X & 1.1X its FY 12E EPS and Book Value. Led by its firm fundamentals, healthy growth rate coupled with steady dividend paying record (Current Yield 4.4%) we maintain our rating with a target price of Rs 144 (1.5X FY 12E BV).

Share’s Data :-
BSE Code : 511676
Mkt. Cap : Rs 550.05 Crores
GIC Housing Finance Ltd. share’s CMP is Rs 102.05 on 22nd Feb 2011.

Stay tuned to BelltheBull Blog for more news on GIC Housing Finance Limited !

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