Indiabulls Housing Finance
BSE SENSEX
36,977
S&P CNX
10,948
7 August 2019
1QFY20 Results Update | Sector: Financials
CMP: INR514
Focus on reducing corporate exposure
Under Review
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Bloomberg
Equity Shares (m)
M.Cap.(INRb)/(USDb)
52-Week Range (INR)
1, 6, 12 Rel. Per (%)
12M Avg Val (INR M)
Free float (%)
IHFL IN
427
219.8 / 3.1
1397 / 458
-23/-21/-61
7868
78.5
Financials & Valuations (INR b)
Y/E March
2019 2020E 2021E
Net Fin inc
58.0 41.9 45.7
PPP
61.8 52.1 55.6
PAT
40.9 34.4 36.9
EPS (INR)
95.9 80.7 86.4
EPS Gr. (%)
5.0 -15.9
7.1
BV/Sh. (INR)
386
424
463
RoA on AUM (%)
3.3
2.9
3.0
RoE (%)
26.6 19.9 19.5
Payout (%)
45.0 45.0 45.0
Valuations
P/E (x)
5.4
6.4
5.9
P/BV (x)
1.3
1.2
1.1
Div. Yield (%)
8.4
7.1
7.6
PAT of INR8.0b was 3% below our estimates. The marginal miss was on account
of slightly higher credit costs and taxes.
Disbursements were steady at 4QFY19 levels of ~INR75b. During the quarter,
the company focused on reducing its commercial real estate (CRE) exposure
due to the impending LVB merger.
It got INR60b of CRE loans refinanced. As a
result, overall AUM declined 6% QoQ/ 10% YoY to INR1.13t. Management
targets to step up disbursements to INR100b, 2QFY20 onwards.
Spreads declined ~20bp YoY to 3.12%, largely due to 100bp rise in cost of
funds. AUM mix incrementally migrated towards retail loans (incl. LAP), the
share of which stood at 84% v/s 83% QoQ and 79% YoY.
During the quarter, the company paid down almost all its CP (share down
from 4% to 1% QoQ). Also, due to the comfortable liquidity situation
(INR285b liquidity on the balance sheet), IHFL assigned only INR15b of loans
during the quarter, recording an upfront income of INR480m.
During the quarter, IHFL recovered INR7b from Palais Royale. Since floating
provisions are not allowed under Ind-AS, in order to utilize the Palais Royale
provisions that were reversed, management classified certain assets as Stage 3
and utilized those provisions against them. These assets include small real
estate exposures coupled with exposures to the Essel Group and Café Coffee
Day.
As a result, the GNPL ratio increased 60bp QoQ to 1.47%. The company
increased its PCR by 300bp sequentially to 25%.
LCR for the company amounts to 550%+, significantly above the RBI’s proposed
requirement.
Update on LVB merger –
Company received approval from CCI in Jun’19.
Application for the merger has been made to the RBI, the BSE and the NSE.
Valuation and view:
Over the past three quarters, IHFL has handled the liquidity
situation well. It curtailed disbursements and focused on raising money via several
sources, especially selldowns, while maintaining margins at the same time. We
expect FY20 to be a year of consolidation – AUM is likely to be largely flat as the
company focuses on reducing corporate exposure. However, the announced
merger with Lakshmi Vilas Bank (LVB) is awaiting the RBI and other regulatory
approvals. Our estimates are yet to factor in the impact of the merger, which we
will do post receipt of all approvals. Hence, we retain our
‘Under Review’
rating on
the stock.
Research Analyst: Alpesh Mehta
(Alpesh.Mehta@MotilalOswal.com); +91 22 6129 1526 |
Piran Engineer
(Piran.Engineer@MotilalOswal.com); +91 22 6129 1539
Nitin Aggarwal
(Nitin.Aggarwal@MotilalOswal.com); +91 22 6129 1542
Motilal Oswal research is available on www.motilaloswal.com/Institutional-Equities, Bloomberg, Thomson Reuters, Factset and S&P Capital.
Investors are advised to refer through important disclosures made at the last page of the Research Report.
 Motilal Oswal Financial Services
Indiabulls Housing Finance
Quarterly Performance
Y/E March
Income from operations
Other Income
Total income
Y-o-Y Growth (%)
Interest expenses
Net Income
Y-o-Y Growth (%)
Operating Exp (Incl Prov)
Profit before tax
Y-o-Y Growth (%)
Tax Provisions
Net Profit
Minority Int/Profit from associates
Net Profit after MI
Y-o-Y Growth (%)
AUM Growth (%)
C/I Ratio (%)
Tax Rate (%)
E: MOSL Estimates
(INR Million)
1Q
38,600
2,114
40,713
23.8
23,351
17,362
19.9
3,337
14,024
32.1
3,538
10,487
60
10,547
30.3
33.4
15.5
25.2
FY19
2Q
3Q
39,804 42,368
2,749
2,516
42,553 44,884
23.3
7.4
25,564 24,574
16,989 20,310
10.2
-3.5
3,123
6,435
13,866 13,875
25.1
-6.8
3,516
4,147
10,349
9,728
92
127
10,442
9,855
21.2
-13.7
28.6
16.2
16.0
16.5
25.4
29.9
4Q
41,990
108
42,098
5.2
23,744
18,355
-1.1
4,080
14,275
17.1
4,261
10,014
48
10,062
-7.0
-1.4
13.3
29.9
1Q
34,861
4,000
38,861
-4.5
23,627
15,234
-12.3
4,175
11,060
-21.1
3,160
7,900
115
8,015
-24.0
-10.1
17.7
28.6
FY20
2QE
3QE
35,558 36,099
2,250
2,500
37,808 38,599
-11.2
-14.0
23,863 24,102
13,945 14,497
-17.9
-28.6
3,582
3,601
10,363 10,895
-25.3
-21.5
2,591
2,724
7,772
8,171
70
70
7,842
8,241
-24.9
-16.4
-11.3
-6.6
20.3
19.7
25.0
25.0
4QE
42,410
2,691
45,100
7.1
25,288
19,812
7.9
5,446
14,366
0.6
4,131
10,235
72
10,308
2.4
-0.6
15.2
28.8
FY19
162,762
7,486
170,248
14.1
97,233
73,015
5.1
16,975
56,040
14.9
15,462
40,578
327
40,905
5.0
-1.7
15.3
27.6
FY20E
138,779
21,589
160,368
-5.8
96,880
63,489
-13.0
16,805
46,684
-16.7
12,605
34,079
340
34,419
-15.9
-0.6
18.0
27.0
Exhibit 1: Quarterly performance v/s expectations and reasons for deviations
Particulars
Income from operations
Other Income
Total income
Interest expenses
Net Income
Operating Expenses
Profit before Tax
Tax Provisions
Net Profit
Minority Int
Net Profit (after minority interest)
Int Exp/ operating inc (%)
Other Income / Total Income (%)
Tax Rate (%)
1QFY20A
34,861
4,000
38,861
23,627
15,234
4,175
11,060
3,160
7,900
115
8,015
67.8
10.3
28.6
1QFY20E
37,543
1,300
38,843
23,506
15,337
4,102
11,235
3,033
8,202
70
8,272
62.6
3.3
27.0
Var. (%)
-7
208
0
1
-1
2
-2
4
-4
-3
Comments
In-line
Higher tax rate than expected
Miss due to higher tax rate
Source: MOFSL, Company
Exhibit 2: We largely maintain estimates
INR B
Net Financing income
Other Income
Net Income
Opex
PBT
Tax
PAT
AUM
Loans
Borrowings
Credit Cost
RoA on AUM
Old Est
FY20
FY21
44.6
48.6
22.0
24.2
61.6
67.4
11.4
12.8
46.6
49.4
12.6
13.3
34.4
36.5
1,213
1,381
898
1,022
1,006
1,144
0.30
0.40
2.9
2.9
New Est
FY20
FY21
41.9
45.7
26.5
28.0
63.5
68.3
11.4
12.8
46.7
49.9
12.6
13.5
34.4
36.9
1,198
1,311
886
970
993
1,087
0.45
0.45
2.9
3.0
% Change
FY20
FY21
-6.0
-6.0
20.7
16.0
3.0
1.4
0.0
0.0
0.2
1.0
0.2
1.0
0.2
1.0
-1.3
-5.0
-1.3
-5.0
-1.3
-5.0
Source: Company, MOFSL
6 August 2019
2
 Motilal Oswal Financial Services
Indiabulls Housing Finance
Conference call highlights
Business Updates
INR285b ready liquidity on the balance sheet.
INR480m upfront income on assignments during the quarter.
Spreads should be stable between 300-325bp according to management.
Tapped ECB market for USD350m in May’19.
Will remain conservative on liquidity and capital position.
Most of the reduction in the CRE book is behind. Further reduction of another
INR20-30b likely.
Targeting INR100b disbursements in 2QFY20 followed by an increase in
ensuing quarters.
Mid-teens AUM growth is possible in FY20.
Hope to hear back from the RBI on LVB merger in the next 45-60 days.
INR60 refinancing of commercial real estate loans during the quarter.
Construction finance assets worth INR100b of five builders refinanced over the
past eight months.
Repurchased USD600m of NCDs this year.
Yields: HL – 9.5-9.75%, LAP – 13%. No change in yields during the quarter.
Asset Quality
Increase in GNPL in 1QFY20 was due to the company having excess provisions
and under Ind-AS, one can’t make floating provisions. Hence, management
classified certain exposures (including Essel and CCD) as Gross Stage 3.
Recovery from Palais Royale during the quarter – ~INR7b.
Additional provisions of INR4.5b over and above the NHB norms.
Write-off of INR280m during the quarter.
INR40b Stage 2 assets (50:50 between retail and corporate).
Others
Cumulative refinance by NHB to all entities, including banks, over the past 30
years amounts to INR2.1t.
2.5m customers.
INR110 loan repayments during the quarter.
Sold down INR15b during the quarter.
Gross borrowing repayment during the quarter of INR60-70b.
Buy-back of Masala Bonds and dollar bonds is subject to the RBI approval.
Capping 3-month CPs to less than 5% of overall borrowing.
6 August 2019
3
 Motilal Oswal Financial Services
Indiabulls Housing Finance
Exhibit 3:
Quarterly Snapshot
FY18
1Q
Profit and Loss (INR m)
Income from operations
Interest Expenses
Net Interest Income
Other Income
Total Income
Operating Expenses
Operating Profit
Provisions
PBT
Taxes
PAT
Minority Interest
PAT Post Minority Interest
Asset Quality
GNPA (INR m)
NNPA (INR m)
Gross NPA (%)
Net NPA (%)
Provisions on AUM (%)
Margins (%) - (calculated)
Yield on loans
Cost of funds
Spreads
Ratios (%)
Cost to Income
Tax Rate
Business Details
Disbursements (INR b)
AUM (INR b)
Borrowings (INR b)
Total AUM Mix (%)
Mortgages
Corporate
Liability Mix (%)
Bank Loans
CP
NCD
ECB
Other Details
Dividend (INR/sh)
30,165
18,408
11,757
2,718
14,475
2,006
12,469
1,850
10,619
2,571
8,049
46
8,095
7,556
2,914
0.80
0.31
0.49
15.4
8.5
6.9
13.9
24.2
70
945
978
78
22
35
0
52
3
9
2Q
31,557
19,113
12,444
2,968
15,412
2,462
12,950
1,870
11,080
2,557
8,523
91
8,614
7,820
3,093
0.78
0.31
0.47
15.1
8.3
6.8
16.0
23.1
90
1,003
1,071
78
22
33
0
54
3
9
3Q
34,197
20,737
13,460
7,593
21,053
2,891
18,162
3,270
14,892
3,492
11,401
23
11,423
8,237
3,301
0.77
0.31
0.46
15.0
8.4
6.6
13.7
23.4
130
1,070
1,126
79
21
34
12
41
3
14
4Q
43,195
21,452
21,743
-3,192
18,551
2,243
16,308
4,120
12,188
1,426
10,761
61
10,822
9,412
4,138
0.77
0.34
0.43
14.8
8.1
6.7
12.1
11.7
195
1,222
1,226
79
21
34
12
42
2
10
1Q
38,600
23,351
15,248
2,114
17,362
2,689
14,673
648
14,024
3,538
10,487
60
10,547
9,825
7,418
0.78
0.59
0.19
14.5
8.3
6.3
15.5
25.2
100
1,260
1,299
79
21
34
15
39
2
10
2Q
39,804
25,564
14,240
2,749
16,989
2,723
14,266
400
13,866
3,516
10,349
92
10,442
9,925
7,462
0.77
0.58
0.19
14.8
8.6
6.2
16.0
25.4
110
1,289
1,351
80
20
31
0
54
4
10
FY19
3Q
42,368
24,574
17,794
2,516
20,310
3,355
16,955
3,080
13,875
4,147
9,728
127
9,855
9,817
7,317
0.79
0.59
0.20
16.9
8.6
8.2
16.5
29.9
39
1,243
1,334
81
19
31
3
43
4
10
4Q
41,990
23,744
18,247
108
18,355
2,435
15,919
1,645
14,275
4,261
10,014
48
10,062
10,606
8,300
0.88
0.69
0.19
14.6
8.9
5.7
13.3
29.9
73
1,205
1,340
83
17
34
4
36
4
10
FY20
1Q
34,861
23,627
11,234
4,000
15,234
2,699
12,536
1,476
11,060
3,160
7,900
115
8,015
16,639
12,405
1.47
1.10
0.37
16.6
9.3
7.3
17.7
28.6
75
1,132
1,257
84
16
35
1
38
4
8
Source: MOFSL, Company
3
(6)
(6)
(25)
(10)
(3)
Variation (%)
QoQ
YoY
(17)
(0)
(38)
3,601
(17)
11
(21)
(10)
(23)
(26)
(21)
141
(20)
(10)
1
(26)
89
(12)
0
(15)
128
(21)
(11)
(25)
90
(24)
6 August 2019
4
 Motilal Oswal Financial Services
Indiabulls Housing Finance
Story in charts
Exhibit 4: Disbursements sequentially stable
Disbursement (INR b)
195
150
62 65
91
53
67
91
70
90
130
100 110
39
Exhibit 5: AUM growth trend
29
31
33
AUM (INR b)
33 33 31
34
AUM Gr. (%)
33
29
16
73 75
(1)
(10)
Source: Company, MOFSL
Source: Company, MOFSL
Exhibit 6: AUM mix gradually moving toward mortgages
Corporate
22
78
21
79
22
78
22
78
22
78
21
79
21
79
Mortgages
21
79
20
80
19
81
17
83
16
84
Exhibit 7: Liability mix – CP share declining
Sell Down (%)
ECB(%)
NCD (%)
CP (%)
Banks (%)
11
49
0
39
10
50
0
37
9
40
11
37
10
52
0
35
10
54
0
33
10
41
12
34
10
42
12
34
11
39
15
34
11
54
0
31
19
43
3
31
22
36
4
34
22
38
1
35
Source: Company, MOFSL
Source: Company, MOFSL
Exhibit 8: Asset quality trend
GNPA (%)
NNPA (%)
1.5
1.1
0.8 0.9 0.9 0.8 0.8 0.8 0.8 0.8 0.8 0.8 0.9
0.7
0.6 0.6 0.6
0.3 0.4 0.4 0.3 0.3 0.3 0.3
Exhibit 9: PAT growth trend (%)
PAT (INR b)
23
25
24
28
26
52
29
30
Growth (%)
21
-14
-7
-24
Source: Company, MOFSL
Source: Company, MOFSL
Exhibit 10: P/E Band
17
12
7
2
P/E (x)
Min (x)
Avg (x)
+1SD
Exhibit 11: P/B Band
14.6
12.5
Max (x)
-1SD
4.7
3.7
2.7
P/B (x)
Avg (x)
Max (x)
3.0
2.3
3.7
9.6
6.7
3.6
6.5
1.7
0.7
1.6
1.0
1.2
Source: Company, MOFSL
Source: Company, MOFSL
6 August 2019
5
 Motilal Oswal Financial Services
Indiabulls Housing Finance
Exhibit 12: Financials — Valuation matrix
Rating
66
ICICIBC*
HDFCB
AXSB
KMB*
IIB
FB
DCBB
Equitas
RBL
Private Aggregate
SBIN (cons)*
PNB
BOI
BOB
CBK
Public Aggregate
Banks Aggregate
HDFC*
LICHF
IHFL
PNBHF
REPCO
Housing Finance
SHTF
MMFS
BAF
CIFC
SCUF
LTFH
MUTH
INDOSTAR
MAS
FY21E
Buy
Buy
Buy
Neutral
Buy
Buy
Neutral
Buy
Buy
Buy
Neutral
Neutral
Buy
Neutral
CMP
(INR)
410
2,189
679
1,485
1,416
88
193
107
395
301
68
70
104
232
Mcap
(USDb)
36.7
84.2
24.5
39.4
11.8
2.5
0.8
0.5
2.4
37.9
4.3
2.7
5.6
2.4
P/E (x)
FY20E
14.7
23.6
20.5
33.6
15.4
11.0
15.9
11.7
16.2
9.2
10.3
-87.9
9.0
8.0
FY21E
11.1
19.5
13.9
27.6
11.8
8.6
12.4
8.9
12.6
8.5
7.3
8.6
4.7
7.6
P/BV (x)
FY20E
1.7
3.5
2.3
4.3
2.6
1.2
1.8
1.3
2.0
1.0
0.7
0.5
0.6
0.5
FY21E
1.5
3.1
2.0
3.7
2.2
1.1
1.6
1.2
1.5
0.9
0.6
0.4
0.6
0.5
RoA (%)
FY20E
1.3
1.9
1.0
1.8
1.9
0.9
1.0
1.7
1.1
0.6
0.4
0.0
0.4
0.3
FY21E
1.5
1.9
1.3
1.8
2.1
1.0
1.1
1.7
1.2
0.7
0.5
0.3
0.7
0.3
RoE (%)
FY20E
12.0
15.9
12.0
13.2
18.6
11.5
12.3
11.9
13.0
11.7
6.6
-0.5
6.4
5.9
FY21E
14.4
16.9
15.4
14.3
20.1
13.3
13.9
14.0
14.3
12.0
8.6
4.7
12.0
6.0
Buy
Buy
Under Review
Buy
Buy
Buy
Buy
Neutral
Buy
Buy
Buy
Neutral
Buy
Buy
2,190
484
514
711
302
982
301
3,268
269
1,412
99
625
292
588
51.0
3.5
2.9
1.7
0.3
3.1
2.5
25.7
2.9
1.3
2.7
3.5
0.4
0.5
25.6
9.1
6.4
9.7
7.0
8.4
11.9
37.0
14.7
8.8
7.8
11.2
8.2
18.6
19.3
7.9
6.0
8.8
7.0
7.6
10.8
30.0
13.4
7.7
6.7
9.9
5.8
16.0
3.2
1.3
1.2
1.4
1.1
1.2
1.6
7.8
2.8
1.3
1.2
2.3
0.8
3.1
2.5
1.2
1.1
1.2
0.9
1.1
1.4
6.3
2.4
1.1
1.1
2.0
0.7
2.7
1.7
1.2
2.9
1.4
2.3
2.4
2.2
3.5
2.3
3.5
2.3
5.5
2.2
4.4
1.7
1.3
2.9
1.4
2.3
2.5
2.2
3.4
2.1
3.6
2.4
5.4
2.4
4.3
13.3
15.5
19.9
15.5
16.5
15.7
14.1
23.2
21.0
15.4
17.1
22.4
10.3
19.0
13.5
15.9
19.3
15.1
16.3
15.3
13.9
23.3
19.2
15.3
17.2
21.8
12.9
19.0
*Multiples adj. for value of key ventures/Investments; For ICICI Bank and HDFC Ltd BV is adjusted for investments in subsidiaries
6 August 2019
6
 Motilal Oswal Financial Services
Indiabulls Housing Finance
Financials and valuations
Income Statement
Y/E March
Financing Income
Financing Charges
Net Financing income
Change (%)
Non interest Income
Net Income
Change (%)
Employee Cost
Other Operating Exp.
Operating profits
Change (%)
Total Provisions
% of operating profit
PBT
Tax
Tax Rate (%)
PAT
Change (%)
Minority Interest
PAT
Change (%)
Dividend (Including tax)
Balance Sheet
Y/E March
Equity Share Capital
Reserves & Surplus
Net Worth
Borrowings
Change (%)
Deferred Tax Liability
Total Liabilities
Cash and bank balance
Investments
Change (%)
Loans
Change (%)
Net Current Assets
Net Fixed Assets
Total Assets
2015
61,210
39,442
21,768
14.3
11,494
33,262
26.8
3,249
2,285
27,728
25.4
3,003
10.8
24,725
5,713
23.1
19,012
21.2
1
19,011
21.5
10,531
2016
78,418
49,714
28,704
31.9
13,837
42,541
27.9
4,131
2,053
36,357
31.1
5,069
13.9
31,289
7,760
24.8
23,529
23.8
81
23,448
23.3
21,459
2017
99,377
64,108
35,270
22.9
17,640
52,910
24.4
4,997
2,366
45,547
25.3
7,829
17.2
37,718
8,633
22.9
29,086
23.6
22
29,064
24.0
13,746
2018
128,105
80,097
48,009
36.1
21,482
69,490
31.3
6,451
3,057
59,982
31.7
11,203
18.7
48,779
10,046
20.6
38,733
33.2
-221
38,954
34.0
21,498
2019
155,290
97,255
58,035
20.9
14,980
73,015
5.1
7,775
3,425
61,816
3.1
5,776
9.3
56,040
15,462
27.6
40,578
4.8
-327
40,905
5.0
22,089
2020E
138,779
96,880
41,899
-27.8
21,589
63,489
-13.0
7,930
3,468
52,091
-15.7
5,407
10.4
46,684
12,605
27.0
34,079
-16.0
-340
34,419
-15.9
18,586
2021E
145,033
99,298
45,735
9.2
22,604
68,339
7.6
8,882
3,874
55,583
6.7
5,645
10.2
49,938
13,483
27.0
36,454
7.0
-408
36,862
7.1
19,906
(INR Million)
2022E
159,729
108,670
51,059
11.6
23,720
74,780
9.4
9,947
4,329
60,503
8.9
6,211
10.3
54,293
14,659
27.0
39,634
8.7
-490
40,123
8.8
21,667
2015
711
65,606
66,317
474,874
33.6
-26
541,186
34,903
61,638
109.2
460,396
29.9
-16,978
541
541,186
2016
843
106,097
106,939
610,853
28.6
760
718,552
29,017
106,928
73.5
608,643
32.2
-27,393
686
718,552
2017
848
124,700
125,548
853,011
39.6
1,103
979,662
56,825
136,166
27.3
826,139
35.7
-41,050
903
979,662
2018
853
141,463
142,316
1,110,564
30.2
0
1,252,880
48,671
147,918
8.6
1,098,335
32.9
-43,732
1,110
1,252,880
2019
853
163,966
164,820
1,057,562
-4.8
0
1,222,382
146,213
197,166
33.3
923,872
-15.9
-47,006
1,560
1,222,383
2020E
853
179,799
180,652
992,799
-6.1
0
1,173,451
114,096
226,741
15.0
886,428
-4.1
-56,407
2,017
1,173,453
2021E
853
196,756
197,609
1,086,730
9.5
0
1,284,339
117,927
260,752
15.0
970,295
9.5
-67,688
2,477
1,284,341
2022E
853
215,213
216,066
1,201,053
10.5
0
1,417,118
122,599
299,865
15.0
1,072,368
10.5
-81,226
2,935
1,417,120
Note: FY18 PAT includes one-off stake sale amounting to INR2.4b
6 August 2019
7
 Motilal Oswal Financial Services
Indiabulls Housing Finance
Financials and valuations
AUM Mix
Assets Under Management (INR b)
Change (%)
On Books (INR b)
% of AUM
Off books (INR b)
% of AUM
E: MOSL Estimates
Ratios
Y/E March
Spreads Analysis (%)
Avg. Yield - on Fin. Portfolio
Avg Cost of funds
Interest Spread on on books
Net Interest Margin on AUM
Profitability Ratios (%)
RoE
RoA (on AUM)
Int. Expended/Int.Earned
Cost/Income Ratio
Empl. Cost/Op. Exps.
Asset quality
GNPA (%)
NNPA (%)
Valuations
Book Value (INR)
BV Growth (%)
Price-BV (x)
EPS (INR)
EPS Growth (%)
Price-Earnings (x)
DPS (INR)
Dividend Payout (%)
Dividend Yield (%)
E: MOSL Estimates
522
26.9
460
88.1
62
11.9
687
31.5
609
88.6
78
11.4
913
32.9
826
90.5
87
9.5
1,230
34.7
1,106
89.9
124
10.1
1,205
-2.0
915
75.9
290
24.1
1,198
-0.6
886
74.0
311
26.0
1,311
9.5
970
74.0
341
26.0
(%)
1,449
10.5
1,072
74.0
377
26.0
2015
14.6
9.7
4.9
4.7
2016
12.6
9.2
3.4
4.7
2017
13.6
8.8
4.8
4.4
2018
13.3
8.2
5.2
4.5
2019
15.4
9.0
6.4
4.8
2020E
15.0
9.5
5.6
3.5
2021E
15.3
9.6
5.7
3.6
2022E
15.3
9.5
5.8
3.7
30.8
4.0
64.4
16.6
58.7
27.1
3.7
63.4
14.5
66.8
25.0
3.4
64.5
13.9
67.9
29.1
3.5
62.5
13.7
67.8
26.6
3.3
62.6
15.3
69.4
19.9
2.9
69.8
18.0
69.6
19.5
3.0
68.5
18.7
69.6
19.4
3.0
68.0
19.1
69.7
0.85
0.36
2015
186.5
9.2
53.5
14.2
35
47.9
0.84
0.35
2016
253.8
36.1
55.7
4.1
45.0
76.0
0.85
0.36
2017
296.2
16.7
68.6
23.2
36.0
39.3
0.77
0.34
2018
333.6
12.6
91.3
33.2
42.0
46.0
1.12
0.47
2019
386.4
15.8
1.3
95.9
5.0
5.4
43.2
45.0
8.4
1.18
0.48
2020E
423.5
9.6
1.2
80.7
-15.9
6.4
36.3
45.0
7.1
1.08
0.43
2021E
463.3
9.4
1.1
86.4
7.1
5.9
38.9
45.0
7.6
1.02
0.41
2022E
506.5
9.3
1.0
94.1
8.8
5.5
42.3
45.0
8.2
6 August 2019
8
 Motilal Oswal Financial Services
Indiabulls Housing Finance
Corporate profile
Company description
Indiabulls Housing Finance (IHFL) is the third
largest housing finance company in India with
AUM of over INR1.2t as of FY19. It was established
as a wholly-owned subsidiary of Indiabulls
Financial Services (IBFSL). In early 2013, the
company was reversed-merged into its housing
finance subsidiary IHFL. IHFL offers home loans to
target client base of middle and upper-middle
income individuals and small and medium-sized
enterprises, or SMEs.
Exhibit 1: Sensex rebased
Source: MOFSL/Bloomberg
Exhibit 2: Shareholding pattern (%)
Jun-19
Promoter
DII
FII
Others
21.5
13.2
52.7
12.6
Mar-19
21.5
13.0
56.5
9.0
Jun-18
21.6
14.5
54.6
9.4
Source: Capitaline
Exhibit 3: Top holders
Holder Name
LIFE INSURANCE CORPORATION OF INDIA
JASMINE CAPITAL INVESTMENTS PTE LTD
STAR FUNDS S.A. SICAV-SIF - STAR
INTERNATIONAL FUND
GOVERNMENT PENSION FUND GLOBAL
CALIFORNIA STATE TEACHERS RETIREMENT
SYSTEM-AQR CAPITAL MANAGEMENT LLC
% Holding
10.7
6.1
2.4
1.8
1.7
Source: Capitaline
Note: FII Includes depository receipts
Exhibit 4: Top management
Name
Sameer Gehlaut
Gagan Banga
Ashwini Omprakash Kumar
Amit Jain
Designation
Chairman & Exec. Director
Vice Chairman & M.D.
Whole-time Director
Company Secretary
Exhibit 5: Directors
Name
Sameer Gehlaut
Gagan Banga
Manjari Kacker
Ajit Kumar Mittal
Sachin Chaudhari
Bisheshwar Prasad Singh*
Gyan Sudha Misra*
Name
Kamalesh Shailesh
Chakrabarty*
Labh Singh Sitara*
Prem Prakash Mirdha*
Shamsher Singh Ahlawat*
Subhash Sheoratan Mundra*
Ashwini Omprakash Kumar
Chandra
Source: Capitaline
*Independent
Exhibit 6: Auditors
Name
Grant Thornton India LLP
Neelam Gupta & Associates
S R Batliboi & Co LLP
Type
Internal
Secretarial Audit
Statutory
Exhibit 7: MOFSL forecast v/s consensus
EPS
(INR)
FY20
FY21
MOFSL
forecast
80.7
86.4
Consensus
forecast
107.5
124.4
Variation
(%)
-25.0
-30.6
Source: Bloomberg
Source: Capitaline
6 August 2019
9
 Motilal Oswal Financial Services
Indiabulls Housing Finance
NOTES
6 August 2019
10
 Motilal Oswal Financial Services
Indiabulls Housing Finance
Explanation of Investment Rating
Investment Rating
Expected return (over 12-month)
BUY
>=15%
SELL
< - 10%
NEUTRAL
< - 10 % to 15%
UNDER REVIEW
Rating may undergo a change
NOT RATED
We have forward looking estimates for the stock but we refrain from assigning recommendation
*In case the recommendation given by the Research Analyst is inconsistent with the investment rating legend for a continuous period of 30 days, the Research Analyst shall within
following 30 days take appropriate measures to make the recommendation consistent with the investment rating legend.
Disclosures
The following Disclosures are being made in compliance with the SEBI Research Analyst Regulations 2014 (herein after referred to as the Regulations).
Motilal Oswal Financial Services Ltd. (MOFSL) is a SEBI Registered Research Analyst having registration no. INH000000412. MOFSL, the Research Entity (RE) as defined in the
Regulations, is engaged in the business of providing Stock broking services, Investment Advisory Services, Depository participant services & distribution of various financial
products. MOFSL is a subsidiary company of Passionate Investment Management Pvt. Ltd.. (PIMPL). MOFSL is a listed public company, the details in respect of which are
available on www.motilaloswal.com. MOFSL (erstwhile Motilal Oswal Securities Limited - MOSL) is registered with the Securities & Exchange Board of India (SEBI) and is a
registered Trading Member with National Stock Exchange of India Ltd. (NSE) and Bombay Stock Exchange Limited (BSE), Multi Commodity Exchange of India Limited (MCX) and
National Commodity & Derivatives Exchange Limited (NCDEX) for its stock broking activities & is Depository participant with Central Depository Services Limited (CDSL) National
Securities Depository Limited (NSDL),NERL, COMRIS and CCRL and is member of Association of Mutual Funds of India (AMFI) for distribution of financial products and Insurance
Regulatory & Development Authority of India (IRDA) as Corporate Agent for insurance products.
Details of associate entities of Motilal Oswal Financial Services Limited are
available on the website at
http://onlinereports.motilaloswal.com/Dormant/documents/List%20of%20Associate%20companies.pdf
MOFSL and its associate company(ies), their directors and Research Analyst and their relatives may; (a) from time to time, have a long or short position in, act as principal in, and
buy or sell the securities or derivatives thereof of companies mentioned herein. (b) be engaged in any other transaction involving such securities and earn brokerage or other
compensation or act as a market maker in the financial instruments of the company(ies) discussed herein or act as an advisor or lender/borrower to such company(ies) or may have
any other potential conflict of interests with respect to any recommendation and other related information and opinions.; however the same shall have no bearing whatsoever on the
specific recommendations made by the analyst(s), as the recommendations made by the analyst(s) are completely independent of the views of the associates of MOFSL even
though there might exist an inherent conflict of interest in some of the stocks mentioned in the research report
MOFSL and / or its affiliates do and seek to do business including investment banking with companies covered in its research reports. As a result, the recipients of this report
should be aware that MOFSL may have a potential conflict of interest that may affect the objectivity of this report. Compensation of Research Analysts is not based on any specific
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https://galaxy.motilaloswal.com/ResearchAnalyst/PublishViewLitigation.aspx
A graph of daily closing prices of securities is available at
www.nseindia.com, www.bseindia.com.
Research Analyst views on Subject Company may vary based on Fundamental
research and Technical Research. Proprietary trading desk of MOFSL or its associates maintains arm’s length distance with Research Team as all the activities are segregated
from MOFSL research activity and therefore it can have an independent view with regards to Subject Company for which Research Team have expressed their views.
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This report is not directed or intended for distribution to or use by any person or entity resident in a state, country or any jurisdiction, where such distribution, publication, availability
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to which this document relates is only available to professional investor and will be engaged only with professional investors.” Nothing here is an offer or solicitation of these
securities, products and services in any jurisdiction where their offer or sale is not qualified or exempt from registration. The Indian Analyst(s) who compile this report is/are not
located in Hong Kong & are not conducting Research Analysis in Hong Kong.
For U.S.
Motilal Oswal Financial Services Limited (MOFSL) is not a registered broker - dealer under the U.S. Securities Exchange Act of 1934, as amended (the"1934 act") and under
applicable state laws in the United States. In addition MOFSL is not a registered investment adviser under the U.S. Investment Advisers Act of 1940, as amended (the "Advisers
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dealer, Motilal Oswal Securities International Private Limited. ("MOSIPL"). Any business interaction pursuant to this report will have to be executed within the provisions of this
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The Research Analysts contributing to the report may not be registered /qualified as research analyst with FINRA. Such research analyst may not be associated persons of the U.S.
registered broker-dealer, MOSIPL, and therefore, may not be subject to NASD rule 2711 and NYSE Rule 472 restrictions on communication with a subject company, public
appearances and trading securities held by a research analyst account.
For Singapore
In Singapore, this report is being distributed by Motilal Oswal Capital Markets Singapore Pte Ltd (“MOCMSPL”) (Co.Reg. NO. 201129401Z) which is a holder of a capital markets
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Specific Disclosures
1 MOSL, Research Analyst and/or his relatives have financial interest in the subject company, as they have equity holdings in the subject company.
2 MOSL, Research Analyst and/or his relatives do not have actual/beneficial ownership of 1% or more securities in the subject company
3 MOSL, Research Analyst and/or his relatives have not received compensation/other benefits from the subject company in the past 12 months
4 MOSL, Research Analyst and/or his relatives do not have material conflict of interest in the subject company at the time of publication of research report
5 Research Analyst has not served as director/officer/employee in the subject company
6 MOSL has not acted as a manager or co-manager of public offering of securities of the subject company in past 12 months
7 MOSL has not received compensation for investment banking/ merchant banking/brokerage services from the subject company in the past 12 months
8 MOSL has not received compensation for other than investment banking/merchant banking/brokerage services from the subject company in the past 12 months
9 MOSL has not received any compensation or other benefits from third party in connection with the research report
10 MOSL has not engaged in market making activity for the subject company
6 August 2019
11
 Motilal Oswal Financial Services
Indiabulls Housing Finance
********************************************************************************************************************************
The associates of MOFSL may have:
- financial interest in the subject company
- actual/beneficial ownership of 1% or more securities in the subject company
- received compensation/other benefits from the subject company in the past 12 months
- other potential conflict of interests with respect to any recommendation and other related information and opinions.; however the same shall have no bearing whatsoever on the
specific recommendations made by the analyst(s), as the recommendations made by the analyst(s) are completely independent of the views of the associates of MOFSL even
though there might exist an inherent conflict of interest in some of the stocks mentioned in the research report.
- acted as a manager or co-manager of public offering of securities of the subject company in past 12 months
- be engaged in any other transaction involving such securities and earn brokerage or other compensation or act as a market maker in the financial instruments of the
company(ies) discussed herein or act as an advisor or lender/borrower to such company(ies)
- received compensation from the subject company in the past 12 months for investment banking / merchant banking / brokerage services or from other than said services.
The associates of MOFSL has not received any compensation or other benefits from third party in connection with the research report
Above disclosures include beneficial holdings lying in demat account of MOFSL which are opened for proprietary investments only. While calculating beneficial holdings, It does not
consider demat accounts which are opened in name of MOFSL for other purposes (i.e holding client securities, collaterals, error trades etc.). MOFSL also earns DP income from
clients which are not considered in above disclosures.
Analyst Certification
The views expressed in this research report accurately reflect the personal views of the analyst(s) about the subject securities or issues, and no part of the compensation of the
research analyst(s) was, is, or will be directly or indirectly related to the specific recommendations and views expressed by research analyst(s) in this report.
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This report has been prepared by MOFSL and is meant for sole use by the recipient and not for circulation. The report and information contained herein is strictly confidential and
may not be altered in any way, transmitted to, copied or distributed, in part or in whole, to any other person or to the media or reproduced in any form, without prior written consent
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nature. The information is obtained from publicly available media or other sources believed to be reliable. Such information has not been independently verified and no guaranty,
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report is prepared solely for informational purpose and does not constitute an offer document or solicitation of offer to buy or sell or subscribe for securities or other financial
instruments for the clients. Though disseminated to all the customers simultaneously, not all customers may receive this report at the same time. MOFSL will not treat recipients as
customers by virtue of their receiving this report.
Disclaimer:
The report and information contained herein is strictly confidential and meant solely for the selected recipient and may not be altered in any way, transmitted to, copied or
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in this report constitutes investment, legal, accounting and tax advice or a representation that any investment or strategy is suitable or appropriate to your specific circumstances.
The securities discussed and opinions expressed in this report may not be suitable for all investors, who must make their own investment decisions, based on their own investment
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document should make such investigations as it deems necessary to arrive at an independent evaluation of an investment in the securities of companies referred to in this
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the information and opinions contained in this document. The Disclosures of Interest Statement incorporated in this document is provided solely to enhance the transparency and
should not be treated as endorsement of the views expressed in the report. This information is subject to change without any prior notice. The Company reserves the right to make
modifications and alternations to this statement as may be required from time to time without any prior approval. MOFSL, its associates, their directors and the employees may from
time to time, effect or have effected an own account transaction in, or deal as principal or agent in or for the securities mentioned in this document. They may perform or seek to
perform investment banking or other services for, or solicit investment banking or other business from, any company referred to in this report. Each of these entities functions as a
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no.: L67190MH2005PLC153397.Correspondence Office Address: Palm Spring Centre, 2nd Floor, Palm Court Complex, New Link Road,
Malad(West), Mumbai- 400 064. Tel No: 022 7188 1000.
Registration Nos.: Motilal Oswal Financial Services Limited (MOFSL)*: INZ000158836(BSE/NSE/MCX/NCDEX); CDSL and NSDL: IN-DP-16-2015; Research Analyst:
INH000000412. AMFI: ARN - 146822; Investment Adviser: INA000007100; Insurance Corporate Agent: CA0579;PMS:INP000006712. Motilal Oswal Asset Management Company
Ltd. (MOAMC): PMS (Registration No.: INP000000670); PMS and Mutual Funds are offered through MOAMC which is group company of MOFSL. Motilal Oswal Wealth
Management Ltd. (MOWML): PMS (Registration No.: INP000004409) is offered through MOWML, which is a group company of MOFSL. Motilal Oswal Financial Services Limited is
a distributor of Mutual Funds, PMS, Fixed Deposit, Bond, NCDs,Insurance Products and IPOs.Real Estate is offered through Motilal Oswal Real Estate Investment Advisors II Pvt.
Ltd. which is a group company of MOFSL. Private Equity is offered through Motilal Oswal Private Equity Investment Advisors Pvt. Ltd which is a group company of MOFSL.
Research & Advisory services is backed by proper research. Please read the Risk Disclosure Document prescribed by the Stock Exchanges carefully before investing. There is no
assurance or guarantee of the returns. Investment in securities market is subject to market risk, read all the related documents carefully before investing. Details of Compliance
Officer: Name: Neeraj Agarwal, Email ID: na@motilaloswal.com, Contact No.:022-71881085.
* MOSL has been amalgamated with Motilal Oswal Financial Services Limited (MOFSL) w.e.f August 21, 2018 pursuant to order dated July 30, 2018 issued by Hon'ble National
Company Law Tribunal, Mumbai Bench.
6 August 2019
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