Dewan Housing stacks up well

Dewan Housing Finance Corporation (DHFCL) was amongst the top gainers yesterday and today too, the stock is up currently over 4% at Rs.410. Intra day high is at Rs.415.50. Its 52-week high is at Rs.569.70, hit on 4th March’15.

The stock is up after foreign fund, Nomura has initiated coverage on the stock as it believes that recent upgrades for the stock have improved the funding profile of the company.

Even our website had initiated coverage on this stock in our Stock Recommendation section on 5th June’15. We had stated that it was the most attractively valued housing finance company on the bourses. It is estimated to show a growth of 20% in current fiscal, which is very pragmatic, given the recently concluded QIP and underlying boom in the housing sector, expected FY16 EPS is likely to be at Rs. 56, which translates to BVPS of Rs. 374, as of 31st March 2016. Thus on current year expected earnings, share is trading at very attractive multiples - PE multiple of 7.26x and PBV of 1.09x. It is seen as a safe bet and has the potential to touch the Rs.530 mark in the next 8-10 months.