Indiabulls Housing Finance
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
Net Fin inc
49.8
61.1
PPP
60.7
69.4
EPS (INR)
91.1 105.1
EPS Gr. (%)
32.8
15.4
BV/Sh. (INR)
324
367
RoA on AUM (%)
3.4
3.0
RoE (%)
29.9
30.4
Payout (%)
50.0
50.0
Valuations
P/E (x)
15.0
13.0
P/BV (x)
4.2
3.7
P/ABV (x)
4.2
3.7
Div. Yield (%)
3.3
3.9
S&P CNX
11,084
IHFL IN
Continued strong growth
421.3
Indiabulls Housing Finance's (IHFL) core operating performance was robust,
573.8/8.6
with strong AUM growth (+32% YoY) and stable reported spreads. We note
1397/741
9/5/49
of a one-time gain of INR7.68b due to the sale of 10% stake in Oak North
2174
Bank to GIC, Singapore.
76.4
AUM growth was in line with trend at 32% YoY to reach INR1.1t. This was
23 January 2018
3QFY18 Results Update | Sector: Financials
CMP: INR1,379
TP: INR1,630 (+18%)
Buy
2020E
76.4
85.4
128.3
22.1
421
2.8
32.6
50.0
10.6
3.2
3.2
4.7
driven by 43% YoY growth in disbursements to INR130b. Management is
bullish on supply pick-up in the affordable housing space.
Despite competitive pressures, IHFL managed to hold reported spreads
steady at 3.22% (vs. 3.25% in 2QFY18). Management continues to guide for
book spreads of 3-3.25%. Incremental cost of funds is around 7.5%.
The share of home loans in the overall book inched up 100bp QoQ to 59%.
With the share continuously inching up (to the target of 66% by FY20), we
believe spread pressure will continue.
Valuation view:
IHFL's transformation from a diversified lender to a
focused mortgage player has yielded returns, with RoE/RoA improving from
3%/0.8% in FY09 to 26%/3.4% in FY17. Focus on core mortgage loans and
market share gains should drive AUM growth of 25%+ over the next three
years. IHFL is among the lowest-levered HFCs. Asset quality trend is likely to
remain stable. We increase our FY18 estimates by 9% to factor in high
growth. However, we lower our FY19/20 estimates by 1%/3% to factor in
mild compression in spreads. Maintain
Buy
with a TP of INR1,630 (3.8x
FY20E book).
FY17
2Q
25,098
3,651
28,749
28.0
16,279
12,470
24.6
3,258
9,212
24.3
2,352
6,861
-18
6,843
23.2
29.3
26.1
25.5
FY18
2Q
30,670
2,755
33,425
16.3
18,355
15,070
20.8
3,935
11,135
20.9
2,615
8,520
91
8,611
25.8
33.1
26.1
23.5
(INR Million)
3Q
33,492
7,565
41,057
36.7
19,531
21,525
56.9
5,932
15,594
55.0
3,939
11,655
23
11,677
55.4
31.8
27.6
25.3
4Q
36,175
3,024
39,199
21.6
20,611
18,588
25.1
4,579
14,009
44.5
3,516
10,493
50
10,543
25.4
28.7
24.6
25.1
FY17
103,990
13,027
117,017
26.8
64,108
52,910
24.4
15,192
37,718
20.5
8,633
29,085
-22
29,064
24.0
32.9
22.9
FY18E
129,897
16,034
145,931
24.7
76,219
69,711
31.8
18,374
51,337
36.1
12,834
38,503
210
38,293
31.8
28.7
25.0
Quarterly Performance
Y/E March
Income from opera ti ons
Other Income
Total income
Y-o-Y Growth (%)
Interes t expens es
Net Income
Y-o-Y Growth (%)
Opera ti ng Expens es
Profit before tax
Y-o-Y Growth (%)
Ta x Provi s i ons
Net Profit
Mi nori ty Int
Net Profit after MI
Y-o-Y Growth (%)
AUM Growth (%)
C/I Ra ti o i ncl provi s i ons (%)
Ta x Ra te (%)
E: MOSL Es ti ma tes
1Q
23,720
2,255
25,975
28.3
14,109
11,866
33.9
3,116
8,750
26.4
2,401
6,349
-49
6,301
23.2
31.5
26.3
27.4
3Q
25,859
4,186
30,045
30.2
16,329
13,716
26.8
3,658
10,058
24.9
2,555
7,502
13
7,515
24.7
30.8
26.7
25.4
4Q
29,314
2,935
32,249
21.8
17,391
14,858
15.6
5,160
9,698
9.0
1,325
8,373
32
8,405
24.4
32.9
34.7
13.7
1Q
29,560
2,690
32,250
24.2
17,722
14,528
22.4
3,928
10,600
21.1
2,764
7,836
46
7,882
25.1
33.0
27.0
26.1
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.

Indiabulls Housing Finance
Exhibit 1: Quarterly performance v/s expectations and deviations for the same (adjusted for one-off items)
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 (%)
3QFY18A
33,492
2,145
35,637
19,531
16,105
4,132
11,974
3,939
8,035
23
8,057
58.3
6.0
32.9
3QFY18E
32,204
3,300
35,504
19,273
16,231
4,083
12,149
3,159
8,990
100
9,090
59.8
9.3
26.0
Var. (%)
4
-35
0
1
-1
1
-1
25
-11
-77
-11
Comments
In-line
In-line
Higher tax rate
Miss due to high tax rate
Source: MOSL
AUM growth was robust at
32% YoY
Continued robust AUM growth at 32% YoY
Disbursements were up 43% YoY to INR130b, manifesting AUM growth of 32%
YoY to INR1.1t.
Share of home loans increased 100bp QoQ to 59%.
Calculated yield on AUM increased 40bp YoY and 90bp QoQ to 13%, driven by
higher yielding products like LAP and corporate loans.
Reported spreads remained largely stable at 3.22% (vs. 3.25% in 2QFY18).
Incremental cost of funds increased 20bp QoQ to 7.5% (vs. 7.3% in 2QFY18).
Incremental yields for different segments in 1QFY18 were: Home Loan – 8.9%;
LAP –11%; Construction finance – 15%.
Asset quality was stable, with GNPL ratio at 0.77% v/s 0.85% in 3QFY17.
Provisions made during the quarter amounted to INR1.47b, as against INR1.78b
in 3QFY17.
Management has guided for
incremental spreads of 275-
300bp
Stable reported spreads
Asset quality stable
Valuation and view
IHFL seems adequately equipped to gain market share from PSU banks, given its
low cost structure. We believe IHFL will gain meaningfully from the
government’s impetus to affordable housing.
We believe the focus on mortgage and market share gains will drive AUM
growth of 25%+ for the next three years. As individual home loans have lower
risk weight than corporate loans, capital consumption will be lower with gradual
shift toward individual home loans. At the same time, increased sell-downs will
also help improve return ratios.
IHFL has consistently outperformed peers on key parameters. Average three-
year RoE at 26% is the best among the peer group. The company offers superior
return ratios with ~3% dividend yield.
We increase our FY18 estimates by 9% to factor in high growth. However, we
lower our FY19/20 estimates by 1%/3% to factor in mild compression in spreads.
We use RI model with Rf of 7%, CoE of 14.4% and terminal growth rate of 5%.
Maintain
Buy
with a target price of INR1,630 (3.8x FY19E book).
23 January 2018
2

Indiabulls Housing Finance
Exhibit 2: We upgrade our estimates to factor in higher growth
INR B
Net Financing income
Other Income
Net Income
Opex
PBT
Tax
PAT
AUM
Loans
Borrowings
Credit Cost
RoA on AUM
FY18
52.4
12.3
64.8
8.9
47.5
12.1
35.5
1,194
1,075
1,128
0.80
2.9
Old Est
FY19
65.9
16.1
81.9
10.3
60.7
15.8
45.1
1,536
1,382
1,465
0.80
2.9
FY20
80.7
20.9
101.6
11.9
75.8
19.7
56.2
1,938
1,744
1,866
0.80
2.8
FY18
49.8
19.9
69.7
9.0
51.3
12.8
38.6
1,175
1,058
1,153
0.90
3.4
New Est
FY19
61.1
18.9
80.1
10.7
59.2
14.8
44.5
1,531
1,378
1,529
0.75
3.0
FY20
76.4
21.8
98.1
12.7
72.3
18.1
54.4
1,964
1,768
1,998
0.75
2.8
FY18
-5.0
61.4
7.6
1.1
8.2
6.1
8.9
-1.6
-1.6
2.2
% Change
FY19
-7.2
18.0
-2.3
4.1
-2.5
-6.2
-1.2
-0.3
-0.3
4.4
FY20
-5.4
4.4
-3.4
7.1
-4.7
-8.3
-3.4
1.4
1.4
7.0
Source: Company, MOSL
Exhibit 3: P/E band
14
11
8
5
2
3.6
P/E (x)
Min (x)
Avg (x)
+1SD
13.3
12.3
6.4
Max (x)
-1SD
Exhibit 4: P/B band
P/B (x)
Min (x)
4.7
11.8
3.7
2.7
1.7
0.7
3.1
3.6
2.4
1.6
1.0
3.4
Avg (x)
+1SD
Max (x)
-1SD
9.3
Source: MOSL
Source: MOSL
Conference call highlights
Business updates
69 smart city branches contributing to 10% of sourcing.
70% of sourcing from top-20 cities.
25% of all disbursements from e-home loans.
RERA has pushed demand for construction finance. Pick-up in commercial RE,
indicator of pick up in residential space.
P&L related
Refinancing of ECB and better rating help bringing down cost of funds.
Incremental efficient borrowings will benefit spreads by 5-10bp.
Spreads at 322bp in 3QFY18.
Incremental cost of funds 7.5%.
Cost of funds on book is 7.92%.
Asset yields likely to go up.
Incremental yields: HL 8.9%, LAP 11%, CF 15%, Overall 10.3%.
Credit costs – 1.47b (excl 1.8b counter cyclical provision).
23 January 2018
3

Indiabulls Housing Finance
BS-related
Approval to raise INR750m of masala bonds from RBI.
Disbursements grown by 35% YoY to INR122b.
Sell-down INR30b of loans, will benefit cost funds. Target INR110b securitization
for FY18. 20% incremental funding to come from securitization.
Meaningful portion of bond borrowing is floating rate.
Bond mix: CP now ~10%.
Securitization: 60% is non-PSL and 40% PSL till three quarters. In 4
th
quarter,
30% is non-PSL and 70% is PSL.
The company has started a USD500m MTM program.
Loan book mix: HL 59%, LAP 20%, 21% corporate loans.
Others
10% stake sale of Oak North to GIC, Singapore led to higher PAT. The stake sale
was for a consideration of INR7.68b. The company has created counter cyclical
provision of INR1.8b from profits of sale in stake in Oak North. The company
continues to hold 20% stake valued at INR15b.
CRISIL rating upgraded to AAA. This has led to bonds being priced 25-30bp lower
yield than those in May-2017. This will help offset increase in yields.
Guidance
Book spread guidance of 300-325bp.
NIM guidance of 5%.
23 January 2018
4

Indiabulls Housing Finance
Exhibit 5:
Quarterly Snapshot
FY16
1Q
2Q
3Q
4Q
1Q
2Q
FY17
3Q
4Q
1Q
FY18
2Q
3Q
Variation (%)
QoQ
YoY
9
6
13
175
43
51
2
82
40
51
37
30
20
46
81
57
62
18
87
55
54
55
Profit and Loss (INR m)
Income from operations 18,290 19,850 20,751 24,009 23,720 25,098 25,859 29,314 29,560 30,670 33,492
Interest Expenses
11,390 12,450 12,258 13,616 14,109 16,279 16,329 17,391 17,722 18,355 19,531
Net Interest Income
Other Income
Total Income
Operating Expenses
Employee
Others
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
NIMs
Ratios (%)
Cost to Income
Tax Rate
RoE (Calc.)
RoA (Calc.)
Business Details
Disbursements-
Quarterly (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)
6,900
1,960
8,859
1,937
914
1,023
6,922
1,810
5,113
0
5,113
4,592
1,935
0.85
0.36
0.49
7,400 8,493 10,392 9,611 8,819 9,530 11,923 11,838 12,315 13,960
2,607 2,326 2,463 2,255 3,651 4,186 2,935 2,690 2,755 7,565
10,007 10,820 12,855 11,866 12,470 13,716 14,858 14,528 15,070 21,525
2,594 2,765 3,957 3,116 3,258 3,658 5,160 3,928 3,935 5,932
1,059 1,012 1,147 1,185 1,358 1,318 1,136 1,332 1,531 1,560
1,535 1,753 2,811 1,931 1,900 2,340 4,024 2,596 2,404 4,372
7,413 8,055 8,898 8,750 9,212 10,058 9,698 10,600 11,135 15,594
1,858 2,010 2,083 2,401 2,352 2,555 1,325 2,764 2,615 3,939
5,555 6,045 6,815 6,349 6,861 7,502 8,373 7,836 8,520 11,655
0
-21
-60
-49
-18
13
32
46
91
23
5,555
4,891
2,028
0.84
0.35
0.49
6,024
5,168
2,169
0.83
0.35
0.48
6,754
5,771
2,393
0.84
0.35
0.49
6,301
5,966
2,545
0.84
0.36
0.48
6,843
6,251
2,548
0.83
0.34
0.49
7,515
6,921
2,917
0.85
0.36
0.49
8,405
7,761
3,271
0.85
0.36
0.49
7,882
7,556
2,914
0.80
0.31
0.49
8,611
7,820
3,093
0.78
0.31
0.47
11,677
8,264
3,312
0.77
0.31
0.46
36
6
7
55
19
14
13.3
9.3
4.0
5.2
21.9
26.1
30.7
3.5
13.3
9.6
3.7
5.2
25.9
25.1
26.1
3.5
13.0
9.0
4.0
5.2
25.6
25.0
23.1
3.5
13.6
9.3
4.3
5.6
30.8
23.4
25.5
3.7
12.8
8.9
4.0
5.0
26.3
27.4
22.9
3.2
12.9
9.3
3.6
4.8
26.1
25.5
24.0
3.2
12.6
8.3
4.3
5.0
26.7
25.4
25.8
3.1
13.0
8.3
4.7
5.0
34.7
13.7
28.1
3.3
12.2
8.2
4.0
4.7
27.0
26.1
26.0
3.0
12.1
7.9
4.2
4.7
26.1
23.5
28.0
3.1
13.0
7.9
5.1
4.4
27.6
25.3
0.0
0.0
45
540
509
62
582
528
65
623
636
91
687
689
53
710
745
67
753
832
91
814
919
132
913
940
70
945
978
90
1,003
1,071
130
1,073
1,132
44
7
6
43
32
23
76
22
55
7
35
3
9
76
23
47
6
33
2
9
76
23
49
6
31
2
9
77
22
49
0
38
2
9
77
23
47
0
40
2
9
78
22
39
0
49
2
9
79
21
37
0
50
3
9
78
22
37
0
51
3
9
78
22
35
0
52
3
9
78
22
33
0
54
3
9
79
21
34
0
53
3
14
Source: Company, MOSL
23 January 2018
5

Indiabulls Housing Finance
Story in charts
Exhibit 6: Disb. growth of 43% YoY
Disbursement (INR b)
91
54
64
45
62
65
53
67
91
70
132
90
130
27
29
29
Exhibit 7: Continued robust AUM growth at +32%
AUM (INR b)
30
32
31
29
AUM Gr. (%)
31
33
33
33
32
23
Source: Company, MOSL
Source: Company, MOSL
Exhibit 8: AUM mix has been stable
Others
3
21
2
22
2
22
1
23
CV
1
23
1
22
Corporate
0
23
0
22
0
21
Mortgages
0
22
0
22
0
22
0
21
Exhibit 9: Management targets 60% share of NCD by FY20
Sell Down (%)
ECB(%)
NCD (%)
CP (%)
Bank Loans (%)
28 28
7 7
76
76
76
76
76
77
77
78
79
78
78
78
79
33 31 38 40
49 50 51 52 54 53
7
6 0 0
6
0 0 0 0
0 0
54 53 59 55 47 49 49 47
39 37 37 35 33 34
7
31 35
Source: Company, MOSL
Source: Company, MOSL
Exhibit 10: Asset quality remains healthy
GNPA (%)
NNPA (%)
0.9 0.8 0.8 0.9 0.9 0.9 0.9 0.8 0.8 0.8 0.8 0.8 0.9 0.9
0.8 0.8 0.8
0.5
0.4 0.4 0.3 0.3 0.4 0.4 0.4 0.4 0.4 0.4 0.3 0.4 0.4 0.3 0.3 0.3
Exhibit 11: Net gearing (x) among lowest compared to peers
6.1 5.9 6.3
3.9
4.3
4.7 4.6 4.8
5.7 5.9
6.2 6.4
5.2
Source: Company, MOSL
Source: Company, MOSL
23 January 2018
6

Indiabulls Housing Finance
Exhibit 12: Financials: Valuation metrics
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
362
35.3
20.1 15.2 11.9
2.1
1.9
1.6
1.1
1.2
1.4
8.8
10.5 12.4
1,951 78.9
29.1 24.2 19.3
4.3
3.8
3.3
1.8
1.9
2.0
16.7 16.6 18.1
619
22.9
42.2 19.9 13.9
2.3
2.1
1.8
0.6
1.1
1.3
5.9
11.1 14.1
1,074 30.9
32.8 25.9 19.8
4.3
3.7
3.1
1.6
1.7
1.8
13.2 14.3 15.8
359
12.7
19.7 15.0 11.7
3.3
2.8
2.3
1.7
1.7
1.8
17.6 19.9 21.5
1,723 15.8
28.2 21.8 17.0
4.5
3.8
3.2
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
103
2.7
18.9 15.9 12.6
1.6
1.5
1.4
0.8
0.8
0.9
9.4
9.8
11.3
185
0.9
25.2 20.6 17.0
2.2
2.0
1.8
0.8
0.9
0.9
10.1 10.4 11.3
76
0.6
9.1
5.7
4.4
0.7
0.7
0.6
0.5
0.7
0.7
8.4
12.3 14.2
32
0.9
16.8
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
88.1 26.6 15.4
2.3
2.1
1.9
0.6
1.6
2.0
2.6
8.2
12.8
537
3.1
33.4 23.7 17.8
3.4
3.1
2.7
1.2
1.3
1.3
12.4 13.7 16.1
318
186
169
173
375
145
398
41.4
5.9
2.7
6.0
3.1
1.5
2.9
25.0
17.6
-143.0
9.7
13.2
7.9
11.6
14.5
9.8
34.4
7.6
5.5
4.9
10.4
8.4
7.7
16.5
5.8
3.8
3.2
9.4
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
1.0
0.8
0.7
0.9
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
1,882
573
1,379
1,301
592
687
614
1,469
508
1,707
1,311
2,047
180
436
778
46.3
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
27.7
14.4
16.5
24.8
60.0
19.1
16.5
18.2
37.6
37.3
22.2
17.7
24.2
10.2
23.7
21.3
12.6
13.0
19.6
50.4
16.4
13.5
13.8
27.2
26.8
19.1
14.1
16.4
10.4
17.8
18.1
10.6
10.4
14.6
40.5
13.7
10.9
11.5
22.0
19.6
15.6
11.8
13.3
9.1
13.8
4.8
2.3
4.3
3.5
17.9
3.2
2.2
2.6
3.4
6.0
4.0
2.4
3.5
2.2
3.0
3.5
2.0
3.8
3.1
14.7
2.7
1.9
2.3
3.2
5.0
3.4
2.1
3.0
1.9
2.6
3.1
1.7
3.3
2.6
12.1
2.3
1.7
1.9
2.9
4.1
2.8
1.8
2.5
1.7
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

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
Equity Net worth
Minority Interest
Borrowings
Change (%)
Deferred Tax Liability
Total Liabilities
Cash and bank balance
Investments
Change (%)
Loans
Change (%)
Net Current Assets
Net Fixed Assets
Total Assets
AUM Mix
AUM (INR b)
Change (%)
On Books (INR b)
% of AUM
Off books (INR b)
% of AUM
E: MOSL Estimates
2013
42,634
25,991
16,643
27.7
5,145
21,788
17.0
2,245
1,761
17,782
19.1
1,231
6.9
16,551
3,891
23.5
12,660
34.4
76
12,584
34.8
7,277
2014
51,865
32,824
19,041
14.4
7,181
26,222
20.4
2,637
1,470
22,115
24.4
2,297
10.4
19,818
4,133
20.9
15,685
23.9
44
15,642
24.3
11,298
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
2018E
125,998
76,219
49,778
41.1
19,933
69,711
31.8
6,096
2,882
60,734
33.3
9,396
15.5
51,337
12,834
25.0
38,503
32.4
-100
38,603
32.8
22,583
(INR Million)
2019E
2020E
161,707
208,623
100,578
132,265
61,129
76,358
22.8
24.9
18,937
21,777
80,065
98,135
14.9
22.6
7,315
8,778
3,378
3,962
69,372
85,395
14.2
23.1
10,147
13,107
14.6
15.3
59,225
72,288
14,806
18,072
25.0
25.0
44,419
54,216
15.4
22.1
-120
-144
44,539
54,360
15.4
22.1
26,055
31,801
2013
625
51,061
51,686
51,686
1,449
312,858
23.7
-1,641
364,351
48,882
23,079
28.4
307,824
20.9
-15,889
456
364,351
2014
668
56,387
57,055
57,055
19
355,395
13.6
-1,848
410,622
44,190
29,470
27.7
354,446
15.1
-18,639
469
410,622
2015
711
65,606
66,317
66,317
20
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
106,939
0
610,853
28.6
760
718,552
29,017
106,928
73.5
608,643
32.2
-27,393
686
718,552
2017
848
120,373
121,221
121,221
0
853,011
39.6
1,103
975,335
56,825
136,166
27.3
826,139
35.7
-45,377
903
975,335
2018E
848
136,393
137,241
137,241
0
1,152,764
35.1
1,103
1,291,108
75,553
211,058
55.0
1,057,581
28.0
-54,452
690
1,291,108
2019E
848
154,877
155,724
155,724
0
1,529,309
32.7
1,103
1,686,136
97,398
274,375
30.0
1,377,756
30.3
-65,343
1,272
1,686,136
2020E
848
177,436
178,284
178,284
0
1,997,765
30.6
1,103
2,177,152
128,777
356,688
30.0
1,767,934
28.3
-78,411
1,487
2,177,152
(%)
1,964
28.3
1,768
90.0
196
10.0
344
-99.9
308
89.4
36
10.6
412
19.6
354
86.1
57
13.9
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
1,175
28.7
1,058
90.0
118
10.0
1,531
30.3
1,378
90.0
153
10.0
23 January 2018
8

Indiabulls Housing Finance
Financials and valuations
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
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)
Adjusted BV (INR)
Price-ABV (x)
EPS (INR)
EPS Growth (%)
Price-Earnings (x)
DPS (INR)
Dividend Payout (%)
Dividend Yield (%)
E: MOSL Estimates
2013
13.5
10.1
3.4
5.4
2014
13.1
10.1
3.0
5.0
2015
12.7
9.7
3.0
4.7
2016
12.6
9.2
3.4
4.7
2017
12.2
8.8
3.4
4.4
2018E
11.9
7.6
4.3
4.8
2019E
11.8
7.5
4.3
4.5
2020E
11.8
7.5
4.3
4.4
25.0
3.8
3.7
61.0
18.0
56.1
27.0
4.0
4.0
63.3
17.1
64.2
30.8
4.0
4.0
64.4
16.6
58.7
27.1
3.7
3.7
63.4
14.5
66.8
25.5
3.4
3.4
64.5
13.9
67.9
29.9
3.4
3.4
60.5
12.9
67.9
30.4
3.0
3.0
62.2
13.4
68.4
32.6
2.8
2.8
63.4
13.0
68.9
0.79
0.33
2013
165.4
5.1
165.4
40.3
25.8
20.0
49.6
0.83
0.36
2014
170.8
3.3
170.8
46.8
16.3
29.0
61.7
0.85
0.36
2015
186.5
9.2
186.5
53.5
14.2
35
47.9
0.84
0.35
2016
253.8
36.1
253.8
55.7
4.1
45.0
76.0
0.80
0.40
2017
286.0
12.7
4.8
286.0
4.8
68.6
23.2
19.9
27.0
39.3
2.0
0.80
0.40
2018E
323.8
13.2
4.2
323.8
4.2
91.1
32.8
15.0
45.5
50.0
3.3
0.80
0.40
2019E
367.4
13.5
3.7
367.4
3.7
105.1
15.4
13.0
52.5
50.0
3.9
0.80
0.40
2020E
420.6
14.5
3.2
420.6
3.2
128.3
22.1
10.6
64.1
50.0
4.7
23 January 2018
9

Indiabulls Housing Finance
Corporate profile
Company description
Indiabulls Housing Finance (IHFL) is the fourth
largest housing finance company in India with AUM
of over INR900b as of FY17. It was established as a
wholly-owned subsidiary of Indiabulls Financial
Services (IBFSL). In early 2013, keeping with IHFL’s
long-term commitment to the housing finance
business, 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: MOSL/Bloomberg
Exhibit 2: Shareholding pattern (%)
Dec-17
Promoter
DII
FII
Others
23.5
11.9
55.7
8.9
Sep-17
23.6
7.2
60.4
8.8
Dec-16
24.1
2.7
60.9
12.4
Source: Capitaline
Exhibit 3: Top holders
Holder Name
Europacific Growth Fund
Life Insurance Corporation Of India
Merrill Lynch markets Singapore pte. Ltd
Tupelo Consultancy LLP
Nomura India investment fund mother fund
% Holding
6.2
4.3
2.5
2.2
1.5
Source: Capitaline
Note: FII Includes depository receipts
Exhibit 4: Top management
Name
Sameer Gehlaut
Gagan Banga
Ashwini Kumar
Mukesh Garg
Pinank Shah
Ramnath Shenoy
Designation
Chairman
Vice Chairman and MD
Deputy Managing Director
Chief Financial Officer
Head Treasury
Executive Vice President, IR
Exhibit 5: Directors
Name
Sameer Gehlaut
Gagan Banga
Rajiv Rattan
Saurabh Kumar Mittal
Karan Singh Khera*
Ram Kumar Sheokand*
Prem Prakash Mirdha*
Name
Shamsher Singh Ahlawat*
Aisharya Katoch
Joginder Singh Kataria
Ajit Kumar Mittal
Ashwini Omprakash Kumar
Kamalesh Shailesh Chandra
Chakrabarty*
Source: Capitaline
*Independent
Exhibit 6: Auditors
Name
Deloitte Haskins & Sells LLP
N D Kapur & Co
Neelam Gupta & Associates
Type
Statutory
Internal
Secretarial Audit
Exhibit 7: MOSL forecast v/s consensus
EPS
(INR)
FY18
FY20
MOSL
forecast
91.1
105.1
128.3
Consensus
forecast
84.3
104.9
131.5
Variation
(%)
8.0
0.2
-2.4
Source: Bloomberg
FY19
Source: Capitaline
23 January 2018
10

Indiabulls Housing Finance
NOTES
23 January 2018
11

Disclosures:
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indirectly related to the specific recommendations and views expressed by research analyst(s) in this report.
Indiabulls Housing Finance
Disclosure of Interest Statement
Analyst ownership of the stock
Indiabulls Housing Finance
No
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
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investors and will be engaged in only with major institutional investors. In reliance on the exemption from registration provided by Rule 15a-6 of the U.S. Securities Exchange Act of 1934, as amended (the "Exchange Act") and
interpretations thereof by the U.S. Securities and Exchange Commission ("SEC") in order to conduct business with Institutional Investors based in the U.S., MOSL has entered into a chaperoning agreement with a U.S.
registered broker-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 chaperoning agreement.
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
Motilal Oswal Capital Markets Singapore Pte Limited is acting as an exempt financial advisor under section 23(1)(f) of the Financial Advisers Act(FAA) read with regulation 17(1)(d) of the Financial Advisors Regulations and is a
subsidiary of Motilal Oswal Securities Limited in India. This research is distributed in Singapore by Motilal Oswal Capital Markets Singapore Pte Limited and it is only directed in Singapore to accredited investors, as defined in
the Financial Advisers Regulations and the Securities and Futures Act (Chapter 289), as amended from time to time. In respect of any matter arising from or in connection with the research you could contact the following
representatives of Motilal Oswal Capital Markets Singapore Pte Limited:
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 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
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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
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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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