Vikson Research

GRUH HOUSING FINANCE LTD.

PAGE: 1

We initiate a buyy rating as on 18 May

2012 @ Rs 656.60 first target 824 & 2nd
target 1000 time frame 6 months.

Price Vs Sensex Chart

MARKET DATA (AS ON 18 MAY 2012

2012)

Price (Rs)

656.6

52 W
H/L(Rs)

751.90 /
340.00

Lat. P/E

19.32

Lat.
EPS(Rs)

33.97

2322

Lat.Eqty (Rs
Cr)

35.43

Lat. BV(Rs)

108.86

Div. Yield
(%)

1.7

Lat. Face
Value

10

Beta-Sensex

0.5018

Mkt. Cap.(Rs
Cr)

Shareholding Pattern
HOLDING PATTERN

Holder
Foreign
Institutions

17%

FORGEIN

18%
2%
2%

Govt Holding

Shares

(%)

6478600

18.35

735406

2.08

736885

2.09

21307785

60.36

6043962

17.12

35302638

100

INSTITUTIONS
NON PROMOTER

Non Promoter
Corp. Hold.

PROMOTERS
PUBLIC & OTHERS
61%

Promoters
Public & Others
Totals

PAGE: 2

COMPANY BACKGROUND
Gruh Finance is engaged in providing loans for purchase and construction of residential houses.
Gruh Finance is a subsidiary of housing finance major HDFC, which holds 60.36% stake in the firm
(as per the shareholding pattern on 31 March 2012).
Gruh Finance Ltd (formerly known as Gujarat Rural Housing Finance Corporation) was
incorporated in 1986 to provide financial services mainly for rural housing,
construction/upgradation of dwelling units, and to developers.
The company came out with an FCD issue in 1994-95, which was oversubscribed. Keeping in view
the competitive environment and the emerging challenges, the company has introduced new
loan products like site finance and loans for non-residential premises. It also plans to finance land
development projects.

Also, during the year 1999-2000, GRUH opened four new retail office in Amravati, Chandrapur,
Modasa and Palanpur and three service centres - one in Pune and two in Surat and hence total
retail network now consists of 28 offices - 17 in Gujarat and 11 in Maharashtra. Due to the stiff
competition, the company has introduced three-tier pricing strategy linked to the duration of the
loan. The company was the first HFC to re-introduce the 20 year home loan product in the
market.
During the year 2000-01, Housing Development Finance Corporation Ltd., (HDFC) the largest
shareholder of the company acquired 68,90,000 equity shares from Gujarat Ambuja Cements
Ltd.,(GACL) in July 2000. As a result, HDFC's shareholding in GRUH currently stands 54.49% and
therefore it is a subsidiary of HDFC. Under the Golden Jubilee Rural Housing Finance Scheme of
the Government of India, GRUH has financed 4,891 dwelling units registering a growth of 35%
over the previous year.

PAGE: 3

PROFIT AND LOSS STATEMENT ANNUAL

Full Year
201203

Full Year
201103

VAR [%]
FullYear

Full Year
201103

Full Year
201003

VAR [%] FullYear

Full Year 201003

Full Year 200903

VAR [%]
FullYear

Gross Sales

513.91

361.07

42.3

361.07

275.82

30.9

275.82

261.81

5.4

Excise Duty

513.91

361.07

42.3

361.07

275.82

30.9

275.82

261.81

5.4

32.37

32.37

32.32

0.2

Other Income

0.07

0.2

-65

0.2

0.87

-77

0.87

1.15

-24.3

Total Income

513.98

361.27

42.3

361.27

309.06

16.9

309.06

295.28

4.7

Total Expenditure

38.75

32.95

17.6

32.95

33

-0.2

33

23.56

40.1

PBIDT

475.23

328.32

44.7

328.32

276.06

18.9

276.06

271.72

1.6

Interest

310.11

200.92

54.3

200.92

180.2

11.5

180.2

201.18

-10.4

PBDT

165.12

127.4

29.6

127.4

95.86

32.9

95.86

70.54

35.9

Depreciation

2.36

1.83

29

1.83

1.44

27.1

1.44

0.96

50

Tax

42.42

33.99

24.8

33.99

25.46

33.5

25.46

19.3

31.9

Fringe Benefit Tax

Deferred Tax

0.07

0.07

120.34

91.51

31.5

91.51

68.96

32.7

68.96

50.28

37.2

120.34

91.51

31.5

91.51

68.96

32.7

68.96

50.28

37.2

EPS (Unit Curr.)

34.13

26.19

30.3

26.19

19.89

31.7

19.89

14.51

37.1

Diluted EPS (Unit Curr.)

34.01

26.13

30.2

26.13

19.85

31.6

19.85

14.51

36.8

Dividend Per Share(Rs.)

11.5

11

4.5

11

6.5

69.2

6.5

4.8

35.4

Dividend (%)

115

110

110

65

65

48

PBIDTM(%)

92.47

90.93

1.7

90.93

100.09

-9.2

100.09

103.79

-3.6

PBDTM(%)

32.13

35.28

-8.9

35.28

34.75

1.5

34.75

26.94

29

PATM(%)

23.42

25.34

-7.6

25.34

25

1.4

25

19.2

30.2

Remark

Net Sales
Other Operating Income

Reported Profit After Tax

Extra-ordinary Items
Adjusted Profit After Extra-

ordinary item

Basic:

PAGE: 4

BALANCE SHEET
200703

200803

200903

201003

201103

Share Capital

34.64

34.65

34.65

34.73

35.16

Reserves Total

129.6

155.62

186.22

229.9

282.78

164.24

190.27

220.87

264.63

317.94

1137.33

1246.57

1954.97

2003.83

2487.6

Unsecured Loans

167.91

526.47

290.18

319.29

478.73

Total Loan Funds

1305.24

1773.04

2245.15

2323.12

2966.33

1469.48

1963.31

2466.02

2587.75

3284.27

1376.59

1769.61

2091.43

2453.7

3176.85

17.75

18.93

19.77

20.11

24.39

9.54

10.26

10.64

10.6

12.18

8.21

8.67

9.13

9.51

12.21

Lease Adjustment

Capital Work in Progress

17.46

16.64

12.77

32.72

34.66

Inventories

Sundry Debtors

Cash and Bank Balance

82.93

159.55

374.88

135.6

123.69

Loans and Advances

64.48

63.65

41.2

26.82

33.16

Total Current Assets

147.41

223.2

416.08

162.42

156.85

22.3

23.48

27.76

27.58

36.32

Provisions

60.71

35.47

40.75

52.36

69.25

Total Current Liabilites & Provisions

83.01

58.95

68.51

79.94

105.57

SOURCES OF FUNDS :

Total Shareholders Funds

Secured Loans

Other Liabilities
Total Liabilities
APPLICATION OF FUNDS :
Loan / Non-Current Assets
Fixed Assets
Gross Block
Less: Accumulated Depreciation
Less:Impairment of Assets
Net Block

Investments
Current Assets,Loans & Advances

Current Liabilities

PAGE: 5

200703

200803

200903

201003

201103

64.4

164.25

347.57

82.48

51.28

Deferred Tax Assets

6.98

7.81

8.37

10.21

10.3

Deferred Tax Liability

4.16

3.67

3.25

0.87

1.03

Net Deferred Tax

2.82

4.14

5.12

9.34

9.27

1469.48

1963.31

2466.02

2587.75

3284.27

16.01

28.79

Net Current Assets

Miscellaneous Expenses not written off

Total Assets
Contingent Liability

KEY FINANCIAL RATIOS

Key Ratios

200703

200803

200903

201003

201103

9.5

8.68

9.77

9.41

9.08

Long Term Debt-Equity Ratio

6.96

6.66

5.97

5.2

5.15

Current Ratio

3.47

4.07

2.66

2.34

2.41

Loans Turnover

0.12

0.13

0.15

0.14

0.13

102.53

102.21

96.09

99.49

106.45

11.06

11.85

13.33

12.23

12.27

6.53

7.1

9.08

7.13

6.84

PBIDTM (%)

84.94

89.47

92.02

89.32

91.11

PBITM (%)

84.38

89.06

91.7

88.86

90.6

PBDTM (%)

25.95

29.55

23.89

31.02

35.35

CPM (%)

20.86

21.23

17.35

22.78

25.9

APATM (%)

20.3

20.81

17.03

22.31

25.39

ROCE (%)

9.34

10.55

12.23

10.87

11.12

RONW (%)

23.58

23.89

24.45

28.41

31.42

Payout (%)

37.32

34.66

35.05

34.61

45.47

8.04

11.54

13.69

18.78

24.24

Debt-Equity Ratio

Advance / Loans Funds (%)

Tot. Income / Capital Employed (%)
Interest Expended / Capital Employed (%)

EPS (Rs.)

PAGE: 6

PROFIT AND LOSS STATEMANT TRAILING QUARTERS

Trailing 1 Qtr
(Current
Year)

Trailing 1
Qtr (Last
Year)

Trailing 2 Qtr
(Current
Year)

Trailing 2 Qtr
(Last Year)

Period

201203

201103

VAR %

201203201112

201103-201012

Gross Sales

165.73

119.19

39

297.65

Excise Duty

165.73

119.19

Other Operating Income

Other Income
Total Income

Trailing 3 Qtr
(Current Year)

Trailing 3 Qtr
(Last Year)

VAR %

201203-201109

201103-201009

VAR %

207.07

43.7

412.43

284.71

44.9

39

297.65

207.07

43.7

412.43

284.71

44.9

6.2

7.46

11.86

-37.1

0.01

0.02

0.31

-93.5

0.17

0.46

-63

165.73

119.2

39

297.67

213.58

39.4

420.06

297.03

41.4

9.81

8.63

13.7

23.74

21.92

8.3

38.8

31.17

24.5

PBIDT

155.92

110.57

41

273.93

191.66

42.9

381.26

265.86

43.4

Interest

88.26

58.11

51.9

169.83

112.24

51.3

243.84

159.71

52.7

PBDT

67.66

52.46

29

104.1

79.42

31.1

137.42

106.15

29.5

Depreciation

0.66

0.52

26.9

1.24

1.04

19.2

1.79

1.47

21.8

Tax

11.43

10.34

10.5

23.99

19.24

24.7

35.84

29.12

23.1

Fringe Benefit Tax

Deferred Tax

55.57

41.6

33.6

78.87

59.14

33.4

99.79

75.56

32.1

Adjusted Profit After Extra-ordinary item

55.57

41.6

78.87

59.14

99.79

75.56

PBIDTM(%)

94.08

92.77

92.03

92.56

92.44

93.38

PBDTM(%)

40.83

44.01

34.97

38.35

33.32

37.28

PATM(%)

33.53

34.9

26.5

28.56

24.2

26.54

Net Sales

Total Expenditure

Reported Profit After Tax

Extra-ordinary Items

-3.9

-7.2

-8.8

PAGE: 7

SECTORAL COMPARISON

8Q Growth Index
Sales
Operating Profit
Cash Generated
Valuation

GRUH Finance
237
180
152

Q-201203
OP
%
GRUH Finance
328.36
1.72
H D F C
12446.10
65.14
LIC Housing Fin. 4398.13
23.02
Dewan Hsg. Fin. 1277.61
6.69
GIC Housing Fin. 361.13
1.89
Can Fin Homes
264.39
1.38
Others
32.20
0.17
Sector
19107.92
100.00

IIA
146
144
190
TTM-201203
23/04/2012
OP
%
Mcap
%
429.92
1.76
2395.81
2.00
15763.14
64.38 100942.15
84.18
5662.57
23.13 12931.66
10.78
1922.14
7.85
2715.36
2.26
414.89
1.69
479.53
0.40
264.39
1.08
237.80
0.20
29.36
0.12
206.06
0.17
24486.41 100.00 119908.37 100.00

Sales jumped to Rs. 165.73 crore

The Company also managed to hold on to the margins.
Consequently O P soared up to Rs. 155.92 crore (+41.03 %)
After providing for interest, the company generated cash before depreciation Rs.
67.66 Crore
This works out to around 40.83 paise per sales rupee Gruh Finance board of directors
at a meeting held on Tuesday, 24 April 2012, recommended a dividend of Rs 11.50
per share. The board also approved a 5-for-1 stock split.

The stock hit a high of Rs 751.90 so far during the day, which is a record
high for the counter. The stock hit a low of Rs 702.15 so far during the day.
The stock had hit a 52-week low of Rs 340 on 8 June 2011.

PAGE: 8

FOCUS CHARTS & TABLES

ADVANCE TO FUNDS
RATIO (%)
120
100
80
60
40
20

RETURN ON NET WORTH (%)

35
30
25
20
15
10
5
0

RONW(%)2

0
200703 200803 200903 201003 201103

DIVIDEND PAYOUT RATIO(%)

50

EARNINGS PER SHARE(%)

25

40

20

30
20

15
PAYOUT(%)2

10

10

5
0
200703 200803 200903 201003 201103

Disclaimer: The calls made herein are for informational purpose and report contains only the viewpoints. We make no representation or warranty
war
regarding the correctness, accuracy or
completeness of any information, and is not responsible for errors of any kind though the information obtained from the sources, which is believed to be reliable. The information contained herein
is strictly confidential and is meant for the intended recipients. Any alteration, transmission, photocopied distribution in part or in whole or reproduction of any form of the information without our
prior consent is prohibited. The information and data are derived from the source that are deemed to be reliable the above ca
calls
lls are based on the theory of Technical Analysis. Neither the company
nor its employee are Responsible for the Profits & loss (es) arising due to the trades. The commodities and derivatives discussed and opinions expressed in this report may not be suitable for all
investors falling under different categories. All futures entail significant risk, which should be fully understood prior to trading. Consult your Investment Advisor / Broker before making any
a
investment. Corp office: SCO 58-59 Sector 17-D,
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team: Published by Jitinder Chauhan (For your feedback/queries email to Jitinder.chauhan@vikson.in or Call 0172-5013535/9914487777)

Vikson Securities research

PAGE: 9