23 January 2018
3QFY18 Results Update | Sector: Financials
Dewan Housing
Buy
BSE SENSEX
36,140
Bloomberg
Equity Shares (m)
M.Cap.(INRb)/(USDb)
52-Week Range (INR)
1, 6, 12 Rel. Per (%)
Avg Val, INRm
Free float (%)
Financials & Valuations (INR b)
Y/E March
2018E 2019E
NII
20.1
26.5
PPP
21.5
28.2
Adj. PAT
11.7
14.9
EPS (INR)
37.4
47.5
EPS Gr. (%)
26.5
26.8
BV (INR)
282
321
RoAA (%)
1.2
1.3
RoE (%)
14.0
15.8
Payout (%)
17.4
17.4
Valuations
P/E (x)
16.4
12.9
P/BV (x)
2.2
1.9
P/ABV (x)
2.2
1.9
Div. Yield (%)
0.9
1.2
S&P CNX
11,084
DEWH IN
Strong growth, stable cost ratios; re-rating to continue
313.2
Dewan Housing Finance’s (DEWH) 3QFY18 PAT grew 25% YoY to INR3.1b.
196.9 / 3.0
The quarter was characterized by strong AUM growth, a stable C/I ratio
678/269
and a secular decline in cost of funds.
-3/22/91
1883
AUM grew 29% YoY to INR1t, largely driven by 54% YoY disbursement
growth. DEWH reported disbursements of INR108b, with the highest
60.8
CMP: INR614
TP: INR720 (+17%)
2020E
33.1
35.2
18.8
59.9
26.1
371
1.3
17.3
17.4
10.3
1.7
1.7
1.5
growth rate in the last 19 quarters. We note that sanctions grew 75% YoY
to INR166b. This strong growth was largely led by the non-home portfolio.
Loan mix is now more skewed toward LAP (at 18%, +20bp QoQ) and
builder finance (at 15%, stable QoQ). Contribution of home loans reduced
by 70bp QoQ to 63% of loan book.
Calculated NIM remained largely unchanged at 3.03%, although we note a
secular decline in calculated cost of funds (-10bp QoQ to 8.75%). Funding
mix remained largely stable, with banks and NCDs contributing 41% and
41%, respectively.
Opex grew 19% YoY to INR1.8b, manifesting into PPoP of INR5.6b (+35%
YoY) and a cost-to-income ratio of 24.1% (+20bp QoQ). Continued focus on
cost rationalization should translate into higher PAT over the medium
term, in our view.
Asset quality was stable, with the GNPA ratio at 0.96%.
Valuation view:
DEWH continues to be a focused play on low-ticket housing.
This, along with the new-found opportunities in LAP and builder finance, is
likely to keep its AUM on a high-growth trajectory. We believe the continued
focus on cost rationalization and a secular decline in cost of funds are likely to
result in higher return ratios and further re-rating in the medium term.
Buy
with a TP of INR720 (2x FY20E BVPS).
FY17
2Q
3Q
21,227 23,151
16,307 18,001
4,920
5,150
21.0
20.8
451
514
5,371
5,664
18.3
21.6
1,398
1,497
6.1
9.1
3,972
4,167
23.2
26.9
450
450
3,522
3,717
1,196
1,269
2,326
2,448
29.0
31.7
16.0
16.9
38.5
28.0
26.0
26.4
34.0
34.2
FY18
2Q
3Q
25,034 25,204
19,034 18,944
6,000
6,260
22.0
21.6
1,108
1,138
7,108
7,398
32.4
30.6
1,698
1,781
21.4
19.0
5,411
5,617
36.2
34.8
1,070
1,000
4,341
4,617
1,408
1,558
2,933
3,060
26.1
25.0
24.6
21.7
10.8
12.7
23.9
24.1
32.4
33.7
FY17
4Q
26,082
19,334
6,748
25.9
1,173
7,921
25.7
2,056
19.8
5,865
27.9
1,133
4,732
1,605
3,128
26.0
25.6
16.3
26.0
33.9
86,531
66,536
19,995
19.8
2,182
22,177
21.4
5,973
8.7
16,204
26.9
2,180
14,024
4,754
9,270
27.1
18.5
33.1
26.9
33.9
(INR M)
FY18
99,849
75,181
24,668
23.4
3,969
28,637
29.1
7,104
18.9
21,533
32.9
4,033
17,500
5,775
11,725
26.5
22.6
23.9
24.8
33.0
DEWH: Quarterly performance
Y/E March
Interest Income
Interest Expenses
Net Interest Income
YoY Growth (%)
Fees and other income
Net Income
YoY Growth (%)
Operating Expenses
YoY Growth (%)
Operating Profits
YoY Growth (%)
Provisions
Profit before Tax
Tax Provisions
Profit after tax
YoY Growth (%)
Loan growth (%)
Borrowings growth (%)
Cost to Income Ratio (%)
Tax Rate (%)
E: MOSL Estimates
1Q
19,319
14,754
4,565
14.5
275
4,840
15.5
1,361
8.4
3,479
18.6
450
3,029
1,015
2,014
16.2
18.3
20.4
28.1
33.5
4Q
22,835
17,475
5,360
22.6
943
6,303
29.1
1,717
10.8
4,586
37.7
830
3,756
1,273
2,483
30.9
16.7
33.1
27.2
33.9
1Q
23,529
17,869
5,660
24.0
549
6,209
28.3
1,570
15.4
4,640
33.4
830
3,810
1,205
2,605
29.3
19.8
34.4
25.3
31.6
Research Analyst: Alpesh Mehta
(Alpesh.Mehta@MotilalOswal.com); +91 22 3982 5415
| Piran Engineer
(Piran.Engineer@MotilalOswal.com); +91 22 3980 4393
Nitin Aggarwal
(Nitin.Aggarwal@MotilalOswal.com); +91 22 3982 5540
| Shubhranshu Mishra
(Shubhranshu.Mishra@MotilalOswal.com); +91 22 3982 5558
Investors are advised to refer through important disclosures made at the last page of the Research Report.
Motilal Oswal research is available on www.motilaloswal.com/Institutional-Equities, Bloomberg, Thomson Reuters, Factset and S&P Capital.

Dewan Housing
Exhibit 1: Quarterly performance and reason for deviations
Particulars
Total income
Interest expenses
Net Income
Opex (inc. provisions)
Profit before Tax
Tax Provisions
PAT before extraordinary item
Extraordinary Gain
PAT after extraordinary item
Int Exp/ Op. Inc. (%)
C/I Ratio incl prov (%)
Tax Rate (%)
3QFY18A
26,342
18,944
7,398
2,781
4,617
1,558
3,060
0
3,060
71.9
37.6
33.7
3QFY18E
26,886
19,796
7,090
2,680
4,410
1,407
3,003
0
3,003
73.6
37.8
31.9
v/s Est. Comments
-2
-4
4
Strong AUM growth
4 Stable opex and provisions
5
11
2
2
In-Line
Source: Company, MOSL
Pick-up in retail lending growth
We note of healthy AUM growth of 29% to INR1t, driven by 18%/54% YoY
growth in retail/non-retail loans. Note that this retail loan growth of 18% is the
highest in eight quarters.
Retail loans now account for 63% of total AUM, down 70bp QoQ. Share of
builder finance was stable at 15% QoQ.
Stable margins, C/I ratio and asset quality
Reported NIM remained largely unchanged at 3.03%, despite lower income from
mutual fund operations (INR319m v/s INR1.4b QoQ).
Importantly, the C/I ratio was largely stable at 24% (+20bp QoQ). We believe
this is a key monitorable for the stock.
The GNPL ratio remained largely stable at 1.0% (90dpd). Credit costs (as % of
AUM) remained largely unchanged sequentially at 41bp.
Valuation and view
DEWH continues to be a focused play on low-ticket housing for non-salaried and
self-employed.
New-found opportunities in LAP and builder finance are likely to keep its AUM
on a high-growth trajectory. We believe the continued focus on cost
rationalization and a secular decline in cost of funds are likely to result in higher
return ratios and further re-rating in the medium term.
Buy
with a TP of INR720 (2x FY20E BVPS).
23 January 2018
2

Dewan Housing
Conference call highlights
Business Updates
Management is very optimistic on growth–both in the short and long term.
Other states in addition to Maharashtra have also started implementing RERA
well.
Management acknowledged that due to competition, repayment rates would
remain elevated – hence, AUM growth could lag disbursement growth.
DHFL has securitized its entire SME portfolio.
Management believes that the company is well capitalized for the next 18-24
months.
Disbursement break-up: HL – INR57.55b; LAP: INR23.25b; Builder: INR19.4b,
SME: INR8.27b.
Break-up of fee income: Processing fee is INR580m, Insurance Commission is
INR320m and other is INR240m.
Treasury income has declined from INR1.5b to INR0.9b QoQ.
Incremental yield is 9.3% in HL and 11.3% in LAP. Incremental CoF is close to
7.85%.
Management targets C/I ratio to decline another 50-100bp over the next 18-24
months by renegotiating contracts with vendors, use of technology and
improving productivity.
Management guidance: Disbursements over the next 1-2 years should grow 27-
30%, AUM should grow 22-24% and PAT should grow somewhere within this
range.
Credit costs, which have increased over the past few quarters, should remain at
current levels.
Less than 10% disbursements come from balance transfers.
Incremental home loan ticket size is INR1.7m.
CLSS – Gujarat, Maharashtra and MP are leading.
Old Est.
FY19
22.1
12.2
34.3
8.3
26.0
4.4
21.5
7.3
14.2
1.2
15.2
45.5
318.9
1,119
1,187
1,302
New Est.
FY19
26.5
10.5
36.9
8.7
28.2
6.0
22.2
7.3
14.9
1.3
15.8
47.5
320.9
1,118
1,174
1,355
% Chg
FY18 FY19 FY20
12.6
19.8
20.8
-13.7 -14.3 -14.2
3.2
7.7
8.6
2.5
4.6
4.8
3.4
8.7
9.7
8.8
36.0
36.0
2.3
3.0
4.5
5.5
0.3
1.7
0.8
4.4
5.9
Guidance
Others
Exhibit 2: We marginally increase estimates to factor in faster AUM growth
INR B
NII
Other Income
Total Income
Operating Expenses
Operating Profits
Provisions
PBT
Tax
PAT
RoA
RoE
EPS
BV
Loans
Borrowings
AUM
FY18
17.8
9.9
27.7
6.9
20.8
3.7
17.1
5.5
11.6
1.2
13.9
37.2
281.4
912
957
1,048
FY20
27.4
14.7
42.1
10.0
32.1
5.3
26.8
9.1
17.7
1.2
16.5
56.5
365.9
1,381
1,464
1,606
FY18
20.1
8.6
28.6
7.1
21.5
4.0
17.5
5.8
11.7
1.2
14.0
37.4
281.6
905
946
1,084
FY20
33.1
12.6
45.7
10.5
35.2
7.3
28.0
9.2
18.8
1.3
17.3
59.9
370.7
1,397
1,474
1,693
0.8
4.4
5.9
0.1
0.6
1.3
-0.7
-0.2
1.1
-1.2
-1.1
0.7
3.5
4.1
5.4
Source: MOSL, Company
23 January 2018
3

Dewan Housing
Exhibit 3: One-year forward P/E
P/E (x)
Min (x)
16.0
12.0
8.0
4.0
0.0
7.3
4.7
2.5
9.9
Avg (x)
+1SD
Max (x)
-1SD
15.1
13.7
Exhibit 4: One-year forward P/B
3.0
2.3
1.5
0.8
0.0
1.5
1.1
0.7
0.3
P/B (x)
Min (x)
Avg (x)
+1SD
Max (x)
-1SD
2.5
2.0
Source: MOSL
Source: MOSL
23 January 2018
4

Dewan Housing
Exhibit 5: Quarterly Snapshot
FY16
1Q
Profit and Loss (INR m)
Interest Income
Interest Expenses
Net Interest Income
Fees and Other Income
Total Income
Operating Expenses
Employee
Others
Operating Profits
Provisions
PBT
Taxes
PAT
Asset Quality (%)
GNPA
NNPA
Ratios (%)
Cost to Income
Tax Rate
CAR
Tier I
Margins Rep. - Cumulative (%)
Cost of Funds
NIMs
Business (INR b)
Sanctions
Disbursements
Loan book
AUM
Average ticket size Rs lac
Borrowing Mix (%)
Banks and FI
NHB
NCD
Deposits
Others
Multilateral Agencies
Loan Mix (%)
Retail home loans
LAP
Builder
SME
16,331
12,343
3,988
201
4,189
1,256
550
705
2,934
320
2,614
881
1,733
2Q
17,640
13,575
4,065
477
4,542
1,318
549
769
3,223
450
2,773
970
1,804
3Q
18,461
14,197
4,264
392
4,656
1,372
563
809
3,285
480
2,805
946
1,859
4Q
19,159
14,786
4,373
507
4,880
1,550
615
935
3,330
500
2,830
934
1,897
1Q
19,319
14,754
4,565
275
4,840
1,361
628
733
3,479
450
3,029
1,015
2,014
2Q
21,227
16,307
4,920
451
5,371
1,398
657
741
3,972
450
3,522
1,196
2,326
FY17
3Q
23,151
18,001
5,150
514
5,664
1,497
663
834
4,167
450
3,717
1,269
2,448
4Q
22,835
17,475
5,360
943
6,303
1,717
656
1,061
4,586
830
3,756
1,273
2,483
1Q
23,529
17,869
5,660
549
6,209
1,570
788
781
4,640
830
3,810
1,205
2,605
FY18
2Q
25,034
19,034
6,000
1,108
7,108
1,698
873
824
5,411
1,070
4,341
1,408
2,933
3Q
25,204
18,944
6,260
1,138
7,398
1,781
892
889
5,617
1,000
4,617
1,558
3,060
Variation (%)
QoQ
YoY
1
(0)
4
3
4
5
2
8
4
(7)
6
11
4
9
5
22
121
31
19
35
6
35
122
24
23
25
0.9
0.0
30.0
30.0
15.8
12.0
10.0
3.0
79
49
538
600
11.7
55
3
32
8
0
3
74
18
6
1
0.8
0.0
29.0
30.1
15.3
11.6
9.9
2.9
77
50
563
628
11.8
54
3
33
8
0
2
76
17
6
1
0.8
0.0
29.5
28.8
16.4
12.6
9.6
2.9
93
64
590
660
12.2
53
3
32
8
0
4
74
16
8
2
1.0
0.0
31.8
28.0
17.0
13.3
9.7
3.0
128
78
618
695
12.4
53
2
33
8
0
4
72
16
10
3
1.0
0.0
28.1
29.2
17.5
12.7
9.6
2.9
88
62
636
720
12.9
52
2
32
9
0
5
72
16
10
3
1.0
0.0
26.0
30.1
17.2
12.2
9.3
3.1
84
66
653
752
13.4
44
2
43
8
0
4
70
16
12
3
1.0
0.0
26.4
30.5
16.3
11.7
9.1
3.1
95
71
690
783
13.8
42
4
42
9
0
4
69
16
13
3
0.9
0.0
27.2
5.2
19.1
14.8
8.8
3.0
131
87
721
836
14.0
42
4
42
8
0
4
66
17
14
3
1.0
0.0
25.3
26.0
18.7
14.5
8.7
3.1
109
82
762
882
14.3
44
4
39
9
0
4
66
17
15
3
1.0
0.0
23.9
26.0
17.2
12.8
8.6
3.0
142
99
814
941
14.6
43
4
40
10
0
3
64
18
15
3
1.0
0.0
24.1
27.7
16.3
12.2
8.5
3.0
166
108
840
1,013
14.5
41
4
41
11
0
3
63
18
15
4
Source: Company, MOSL
17
9
3
8
75
54
22
29
23 January 2018
5

Dewan Housing
Story in charts
Exhibit 6: Robust disbursement growth of +54% YoY
Disbursement (INR b)
YoY Gr. (%)
28
27
28
Exhibit 7: Sturdy pick-up in AUM growth
AUM (INRb)
27
25
AUM growth (%)
25
29
22
20
20
19
20
23
40 56 43 43 49 63 49 50 64 78 62 66 71 87 82 99 108
526 569 600 628 660 695 720 752 783 836 882 941 1,013
Source: Company, MOSL
Source: Company, MOSL
Exhibit 8: Reported margins stable (%)
Exhibit 9: Increasing proportion of LAP and CF in AUM mix
(%)
Individual Loans
5
6
5
7
8
Commercial / LAP
7
Project Loans & Others
16 17 18 18
18 17 16
16 16 16
16 17
17 18 18
79 77 77 75 74 76 74
72 72 70 69
66 66 64 63
10 12 13 14 16
17 18 19 19
Source: Company, MOSL
Source: Company, MOSL
Exhibit 10: Stable Liability mix (%)
Banks
Money market
NHB
Others
8 7 8 11 10 10 12 12
14 11 13 13 14 14 15
4 4 3 3 3 3 2
5
2 2 4 4 4 4 4
25 28 28 32
24
33 32 33 32 43
42 42 39 40 41
63 64 60 58 55 54 53 53 52
44 42 42 44 43 41
Exhibit 11: C/I ratio has been on a declining trend (%)
33.1
32.2
29.7 30.0 29.0 29.5
31.8
28.1
27.2
25.3
23.9 24.1
26.0 26.4
Source: Company, MOSL
Source: Company, MOSL
23 January 2018
6

Dewan Housing
Exhibit 12: Valuation Matrix
Rating
66
ICICIBC*
HDFCB
AXSB
KMB*
YES
IIB
IDFC Bk
FB
DCBB
JKBK
SIB
Equitas
RBL
Private Aggregate
SBIN (cons)*
Buy
PNB
Buy
BOI
Neutral
BOB
Buy
CBK
Neutral
UNBK
Neutral
INBK
Buy
Public Aggregate
Banks Aggregate
HDFC*
Buy
LICHF
Neutral
IHFL
Buy
PNBHF
Buy
GRHF
Neutral
REPCO
Buy
DEWH
Buy
Housing Finance
SHTF
Buy
MMFS
Buy
BAF
Buy
CIFC
Buy
SCUF
Buy
LTFH
Buy
MUTH
Neutral
CAFL
Buy
Asset Finance
NBFC Aggregate
FY20E
Buy
Buy
Buy
Buy
Buy
Buy
Neutral
Buy
Neutral
Buy
Buy
Buy
Buy
CMP
Mcap
P/E (x)
P/BV (x)
RoA (%)
RoE (%)
(INR) (USDb) FY18E FY19E FY20E FY18E FY19E FY20E FY18E FY19E FY20E FY18E FY19E FY20E
351
35.2
19.3 14.6 11.4
2.0
1.8
1.6
1.1
1.2
1.4
8.8
10.5 12.4
1,964 78.8
29.3 24.4 19.5
4.3
3.8
3.3
1.8
1.9
2.0
16.7 16.6 18.1
611
22.9
41.6 19.7 13.7
2.3
2.1
1.8
0.6
1.1
1.3
5.9
11.1 14.1
1,071 30.9
32.7 25.8 19.8
4.3
3.7
3.1
1.6
1.7
1.8
13.2 14.3 15.8
355
12.7
19.5 14.9 11.5
3.2
2.7
2.3
1.7
1.7
1.8
17.6 19.9 21.5
1,683 15.8
27.6 21.3 16.6
4.4
3.7
3.1
1.8
1.9
1.9
17.0 19.1 20.7
59
3.2
19.7 18.4 15.1
1.3
1.2
1.2
0.8
0.8
0.9
6.8
6.9
7.9
102
2.7
18.6 15.6 12.4
1.6
1.5
1.3
0.8
0.8
0.9
9.4
9.8
11.3
187
0.9
25.4 20.8 17.1
2.3
2.1
1.8
0.8
0.9
0.9
10.1 10.4 11.3
77
0.6
9.1
5.7
4.5
0.7
0.7
0.6
0.5
0.7
0.7
8.4
12.3 14.2
32
0.9
16.7
8.5
6.5
1.2
1.1
0.9
0.4
0.8
0.9
6.9
12.7 14.8
153
0.8
88.5 26.7 15.5
2.3
2.1
1.9
0.6
1.6
2.0
2.6
8.2
12.8
529
3.1
33.0 23.4 17.5
3.4
3.0
2.6
1.2
1.3
1.3
12.4 13.7 16.1
306
176
164
165
363
141
382
41.4
5.9
2.7
6.0
3.1
1.5
2.9
24.0
16.7
-138.7
9.2
12.8
7.6
11.1
13.9
9.3
33.4
7.3
5.4
4.8
10.0
8.1
7.3
16.0
5.6
3.6
3.1
9.0
1.1
1.0
0.7
1.0
0.8
0.5
1.2
1.0
0.9
0.7
0.9
0.7
0.4
1.1
0.9
0.8
0.7
0.8
0.6
0.4
1.0
0.3
0.3
0.0
0.4
0.3
0.3
0.7
0.5
0.5
0.1
0.5
0.6
0.4
0.7
0.8
0.5
0.2
0.6
0.8
0.6
0.7
5.3
5.3
-0.4
6.4
5.0
5.9
10.9
8.0
9.0
1.8
9.4
11.3
9.1
11.2
13.1
10.4
3.6
10.9
14.7
12.6
11.3
1,874
573
1,354
1,292
592
695
630
1,474
488
1,705
1,310
2,042
178
432
778
46.2
4.5
8.9
3.4
3.4
0.7
3.1
5.2
4.7
15.3
3.2
2.1
5.1
2.7
1.2
27.5
14.4
16.2
24.6
60.1
19.3
17.0
18.3
36.2
37.3
22.2
17.7
24.0
10.1
23.7
21.1
12.6
12.7
19.4
50.4
16.6
13.9
13.9
26.1
26.8
19.1
14.1
16.3
10.3
17.8
18.0
10.6
10.2
14.5
40.6
13.9
11.1
11.5
21.1
19.6
15.6
11.8
13.2
9.0
13.8
4.8
2.3
4.2
3.5
17.9
3.2
2.2
2.6
3.3
6.0
4.0
2.4
3.5
2.2
3.0
3.5
2.0
3.7
3.1
14.7
2.7
2.0
2.3
3.1
5.0
3.4
2.1
3.0
1.9
2.6
3.1
1.7
3.2
2.6
12.1
2.3
1.7
2.0
2.8
4.1
2.8
1.8
2.5
1.6
2.2
1.9
1.4
3.2
1.7
2.4
2.3
1.2
2.7
1.8
3.5
3.0
3.3
1.7
5.4
1.7
1.9
1.4
3.1
1.5
2.4
2.3
1.2
3.1
2.1
3.6
3.0
3.6
2.2
5.0
1.8
1.9
1.5
3.1
1.5
2.4
2.3
1.2
3.3
2.2
3.7
3.1
3.7
2.3
5.1
1.9
19.1
16.9
27.6
15.0
32.7
18.1
13.9
15.1
10.7
20.2
19.6
14.3
15.8
23.8
13.2
18.3
16.9
31.0
16.7
32.1
17.9
15.2
17.4
12.2
20.4
19.2
15.9
19.6
19.9
15.4
18.0
17.4
33.8
19.4
32.7
18.0
16.5
18.3
13.9
23.1
19.8
16.6
20.4
19.6
17.2
*Multiples adj. for value of key ventures/Investments; For ICICI Bank and HDFC Ltd BV is adjusted for investments in subsidiaries
23 January 2018
7

Dewan Housing
Financials and valuations
Income Statement
Y/E March
Interest on housing loans
Interest Expended
Net Interest Income
Change (%)
Fee Income
Treasury Income
Other Income
Net Income
Change (%)
Operating Expenses
Operating Profit
Change (%)
Provisions
% of average loans
Extra ordinary Income
PBT
Tax
Tax Rate (%)
Reported PAT
Change (%)
Adjusted PAT
Change (%)
Proposed Dividend
Balance Sheet
Y/E March
Share Capital
Reserves & Surplus
Net Worth
Borrowings
Change (%)
Total Liabilities
Investments
Change (%)
Loans
Change (%)
Net Fixed Assets
Net Current Assets
Total Assets
E: MOSL Estimates
2012
28,633
23,496
5,138
28.6
2,395
1,091
275
8,899
24.9
3,349
5,551
21.6
463
0.20
250
5,338
1,304
24.4
4,034
12.9
3,784
17.5
478
2013
37,977
31,194
6,783
32.0
1,992
644
177
9,596
7.8
3,039
6,557
18.1
450
0.2
0
6,107
1,588
26.0
4,519
12.0
4,519
19.4
720
2014
46,705
37,826
8,879
30.9
2,280
671
21
11,851
23.5
3,800
8,051
22.8
700
0.2
0
7,351
2,061
28.0
5,290
17.1
5,290
17.1
1,202
2015
57,160
44,596
12,564
41.5
1,860
769
27
15,221
28.4
4,740
10,480
30.2
1,050
0.2
0
9,430
3,218
34.1
6,213
17.4
6,213
17.4
968
2016
69,706
54,900
14,806
17.8
1,488
1,757
49
18,100
18.9
5,328
12,772
21.9
1,750
0.3
0
11,022
3,730
33.8
7,292
17.4
7,292
17.4
2,811
2017
81,602
66,536
15,066
1.8
2,091
4,824
55
22,036
21.7
5,832
16,204
26.9
2,180
0.3
19,694
33,718
4,754
14.1
28,965
297.2
9,270
27.1
4,559
2018E
95,267
75,181
20,085
33.3
3,869
4,583
100
28,637
30.0
7,104
21,533
32.9
4,033
0.4
0
17,500
5,775
33.0
11,725
-59.5
11,725
26.5
2,049
(INR Million)
2019E
2020E
117,066 146,296
90,610 113,166
26,456
33,129
31.7
25.2
4,642
5,571
5,729
6,874
120
150
36,947
45,725
29.0
23.8
8,705
10,480
28,242
35,245
31.2
24.8
6,050
7,259
0.5
0.5
0
0
22,192
27,985
7,323
9,235
33.0
33.0
14,869
18,750
26.8
26.1
14,869
18,750
26.8
26.1
2,598
3,277
(INR Million)
2019E
2020E
3,132
3,132
97,355 112,943
100,487 116,075
1,173,541 1,473,624
24.1
25.6
1,274,028 1,589,699
140,143 174,867
23.2
24.8
1,117,658 1,396,800
23.5
25.0
9,290
9,755
6,936
8,277
1,274,028 1,589,699
2012
1,168
19,159
20,327
246,717
19.2
268,971
2,141
-68.9
254,694
27.8
2,582
6,059
268,971
2013
1,282
31,089
32,371
322,527
30.7
354,898
2,750
28.5
342,219
34.4
4,379
5,549
354,898
2014
1,284
34,465
35,750
398,749
23.6
434,498
7,215
162.3
408,732
19.4
9,877
8,674
434,498
2015
1,457
44,901
46,358
494,456
24.0
540,814
10,062
39.5
515,109
26.0
9,846
5,796
540,814
2016
2,918
47,252
50,170
610,496
23.5
660,666
8,932
-11.2
622,951
20.9
7,805
20,978
660,666
2017
2018E
3,132
3,132
75,696
85,067
78,827
88,198
812,645 945,984
33.1
16.4
891,472 1,034,182
135,349 113,760
1,415.3
-16.0
738,398 905,248
18.5
22.6
8,427
8,848
9,299
6,326
891,472 1,034,182
23 January 2018
8

Dewan Housing
Financials and valuations
Ratios
Y/E March
Spreads Analysis (%)
Avg. Yield - Housing loans
Avg. Cost of Funds
Net Interest Margin (On AUM)
Profitability Ratios (%)
RoAE
RoAA
Int. Expended/Int. Earned
Other Inc./Net Income
Efficiency Ratios (%)
Fees/Operating income
Op. Exps./Net Income
Empl. Cost/Op. Exps.
Asset-Liability Profile (%)
Loans/Borrowings Ratio
Debt/Equity (x)
Gross NPA (INR Mn)
Net NPA (INR Mn)
Valuations (Consolidated)
Book Value (INR)
Growth (%)
Price-BV (x)
Adjusted BV (INR)*
Price-ABV (x)
OPS (INR)
Growth (%)
Price-OP (x)
EPS (INR)
Growth (%)
Price-Earnings (x)
Dividend Per Share
Dividend Yield (%)
E: MOSL Estimates
2012
12.6
10.4
2.263
2013
12.3
11.0
2.20
2014
11.6
10.5
2.2
2015
11.3
10.0
2.5
2016
11.0
9.9
2.3
2017
10.7
9.4
2.0
2018E
9.9
8.6
2.1
2019E
9.6
8.6
2.2
2020E
9.6
8.6
2.2
21.1
1.53
82.1
42.3
17.1
1.45
82.1
29.3
15.5
1.34
81.0
25.1
15.1
1.27
78.0
17.5
15.1
1.21
78.8
18.2
14.4
1.19
81.5
31.6
14.0
1.22
78.9
29.9
15.8
1.29
77.4
28.4
17.3
1.31
77.4
27.5
43.1
37.6
35.5
30.4
31.7
46.3
28.3
32.1
46.4
17.7
31.1
41.4
11.6
29.4
43.2
12.9
26.5
45.0
18.0
24.8
49.0
16.4
23.6
51.9
15.8
22.9
53.9
96.9
12.1
1,316
0
94.2
10.0
2,393
1,560
97.6
11.2
3,175
2,099
96.0
10.7
4,851
3,460
98.0
12.2
5,731
3,610
110.1
10.3
6,784
4,410
104.5
10.7
8,141
5,048
105.0
11.7
9,770
5,862
105.5
12.7
11,723
7,034
87
16.8
72.0
23.8
8.7
14.8
5.6
1.8
126
45.1
126
26
7.6
17.6
18.7
2.5
139
10.3
139
31
22.6
20.6
16.9
4.0
159
14.3
159
36
14.8
21.3
3.5
3.0
172
8.1
169
44
21.7
25.0
17.2
8.0
252
46.4
2.4
251
2.4
52
18.2
11.9
29.6
18.5
20.7
4.0
0.7
282
11.9
2.2
282
2.2
69
32.9
8.9
37.4
26.5
16.4
5.6
0.9
321
13.9
1.9
321
1.9
90
31.2
6.8
47.5
26.8
12.9
7.1
1.2
371
15.5
1.7
371
1.7
113
24.8
5.5
59.9
26.1
10.3
9.0
1.5
23 January 2018
9

Dewan Housing
Corporate profile
Company description
Dewan Housing Finance’s (DEWH) promoted by the
Wadhawan Group in 1984, is the 4th largest
housing finance company in India AUM of INR835bn
as of March 2017 (after HDFC, LICHF and IHFL).
DHFL offers home loans to low and middle income
segment in tier II and III cities. DEWH is the third
largest HFC in India with. DHFL is present at 367
locations across India via branches, subsidiaries and
alliances with public sector banks.
Source: MOSL/Bloomberg
Exhibit 1: Sensex rebased
Exhibit 2: Shareholding pattern (%)
Dec-17
Promoter
DII
FII
Others
39.2
10.2
20.8
29.8
Sep-17
39.2
9.5
22.7
28.5
Dec-16
39.3
6.0
26.4
28.4
Exhibit 3: Top holders
Holder Name
Hemisphere Infrastructure India Pvt Limited
Galaxy Infraprojects and Developers Private
Limited
Silicon First Realtors Private Limited
Jhunjhunwala Rakesh Radheshyam
LIC of India
% Holding
3.4
3.3
3.2
3.2
2.7
Source: Capitaline
Note: FII Includes depository receipts
Source: Capitaline
Exhibit 4: Top management
Name
Kapil Wadhawan
Niti Arya
Designation
Chairman & Managing Director
Company Secretary
Exhibit 5: Directors
Name
Dheeraj Wadhawan
M Venugopalan
Rajiv Kumar
Name
G P Kohli
V K Chopra
Vijaya Sampath
Source: Capitaline
*Independent
Exhibit 6: Auditors
Name
Chaturvedi & Shah
Jayshree Dagli & Associates
Type
Statutory
Secretarial Audit
Exhibit 7: MOSL forecast v/s consensus
EPS (INR)
FY18
FY19
FY20
MOSL
forecast
37.4
47.5
59.9
Consensus
forecast
37.1
44.6
53.3
Variation (%)
0.8
6.4
12.4
Source: Bloomberg
Source: Capitaline
23 January 2018
10

Dewan Housing
NOTES
23 January 2018
11

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Dewan Housing
Disclosure of Interest Statement
Analyst ownership of the stock
Dewan Housing
No
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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 distributed, in part or in whole, to any other person
or to the media or reproduced in any form, without prior written consent. This report and information herein is solely for informational purpose and may not be used or considered as an offer document or solicitation of
offer to buy or sell or subscribe for securities or other financial instruments. Nothing 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
objectives, financial positions and needs of specific recipient. This may not be taken in substitution for the exercise of independent judgment by any recipient. Each recipient of this 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 document (including the merits and risks involved), and should consult its own advisors to
determine the merits and risks of such an investment. The investment discussed or views expressed may not be suitable for all investors. Certain transactions -including those involving futures, options, another derivative
products as well as non-investment grade securities - involve substantial risk and are not suitable for all investors. No representation or warranty, express or implied, is made as to the accuracy, completeness or fairness of
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. MOSL, 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 separate, distinct and independent of each other. The recipient should take this into account before interpreting the document. This report has been prepared on the basis of information that is already
available in publicly accessible media or developed through analysis of MOSL. The views expressed are those of the analyst, and the Company may or may not subscribe to all the views expressed therein. This document is
being supplied to you solely for your information and may not be reproduced, redistributed or passed on, directly or indirectly, to any other person or published, copied, in whole or in part, for any purpose. This report is not
directed or intended for distribution to, or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction, where such distribution, publication, availability or use would
be contrary to law, regulation or which would subject MOSL to any registration or licensing requirement within such jurisdiction. The securities described herein may or may not be eligible for sale in all jurisdictions or to
certain category of investors. Persons in whose possession this document may come are required to inform themselves of and to observe such restriction. Neither the Firm, not its directors, employees, agents or
representatives shall be liable for any damages whether direct or indirect, incidental, special or consequential including lost revenue or lost profits that may arise from or in connection with the use of the information.
The
person accessing this information specifically agrees to exempt MOSL or any of its affiliates or employees from, any and all responsibility/liability arising from such misuse and agrees not to hold MOSL or any of its affiliates or
employees responsible for any such misuse and further agrees to hold MOSL or any of its affiliates or employees free and harmless from all losses, costs, damages, expenses that may be suffered by the person accessing this
information due to any errors and delays.
Registered Office Address: Motilal Oswal Tower, Rahimtullah Sayani Road, Opposite Parel ST Depot, Prabhadevi, Mumbai-400025; Tel No.: 022-3980 4263; www.motilaloswal.com. Correspondence Address: Palm Spring
Centre, 2nd Floor, Palm Court Complex, New Link Road, Malad (West), Mumbai- 400 064. Tel No: 022 3080 1000. Compliance Officer: Neeraj Agarwal, Email Id:
na@motilaloswal.com,
Contact No.:022-30801085.
Registration details of group entities.: MOSL: SEBI Registration: INZ000158836 (BSE/NSE/MSE); CDSL: IN-DP-16-2015; NSDL: IN-DP-NSDL-152-2000; Research Analyst: INH000000412. AMFI: ARN 17397. Investment Adviser:
INA000007100. Motilal Oswal Asset Management Company Ltd. (MOAMC): PMS (Registration No.: INP000000670) offers PMS and Mutual Funds products. Motilal Oswal Wealth Management Ltd. (MOWML): PMS
(Registration No.: INP000004409) offers wealth management solutions. *Motilal Oswal Securities Ltd. is a distributor of Mutual Funds, PMS, Fixed Deposit, Bond, NCDs, Insurance and IPO products. * Motilal Oswal
Commodities Broker Pvt. Ltd. offers Commodities Products. * Motilal Oswal Real Estate Investment Advisors II Pvt. Ltd. offers Real Estate products. * Motilal Oswal Private Equity Investment Advisors Pvt. Ltd. offers Private
Equity products
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