09 - Chapter 5 PDF

CHAPTER -5
DATA ANALYSIS
AND
INTERPRETATION
CHAPTER 5
DATA ANALYSIS AND INTERPRETATION
CHAPTER-5
Sr. Name of Topic Page
No. No.
5.1 Introduction 187
Comparisons of Home Loan Schemes 189
(a) Comparison of Eligibility Criteria of AGE , INCOME and WORK 189
EXPERIENCE for Salaried and Self Employed person for Selected
Housing Finance Companies of India
(b) Comparison of Eligibility Criteria of LOAN Amount, LOAN tenure 190
and FINANCE Percentage for Selected Housing Finance Companies
of India
Comparison of Types of Various Housing Loan Scheme for Selected 191
(c)
(d) Comparison of Processing Fees for Selected Housing Finance 191
Companies of India
(e) Comparison of Administrative and Commitment charges for Selected 193
(f) Comparison of Security of loan for Selected Housing Finance 194
5.2
Companies of India
(g) Comparison of Sanctioning Period for Selected Housing Finance 195
Companies of India
(h) Comparison of Disbursement period for Selected Housing Finance 196
Companies of India
(i) Comparison of Insurance required for Selected Housing Finance 197
Companies of India
(j) Comparison of Penalty for Pre-Payment for Selected Housing Finance 198
Companies of India
(k) Comparison of Home Loan Interest Rate for Selected Housing 199
Finance Companies of India
(l) Comparison of Home Loan Sanction, Disbursement and percentage of 201
Disbursement to Sanction Loan for Selected Housing Finance
Companies of India
Financial Data Analysis
Profitability and Efficiency Criteria Analysis 205
(A) (a) Net Profit(Net Income) Margin 206
(b) Asset Turnover Ratio 209
Return Base Analysis 212
(a) Return on Net Worth 212
(B)
(b) Return on Capital Employed 215
5.3 (c) Return on Assets 218
Per Share Return Base Analysis 221
(C) (a) Basic EPS 221
(b) Fund from Operations Per Share 224
Liquidity Base Analysis 227
(a) Current Ratio 228
(D)
(b) Dividend Pay-out Ratio 231
(c) Debt Equity Ratio 234
5.4 Conclusion 237
References 237
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5.1 INTRODUCTION
The Indian real estate market has witnessed an unprecedented rise in the realty and
land prices in the last ten years or so. In the present condition the best investment
option most people would rely on is buying a home. Home is the safest investment
because it is one of the few assets whose value appreciates over the years.
Buying a home is not only a dream that people cherish life long, but it can also be a
tax saving option, as tax deductions are available on the purchase of a house if you
apply for housing loans in India. Following the boom in the real estate market, a
healthy competition can be witnessed in the housing finance sector, as more and more
banks and financial institutions are entering the house loan market. The market is
flooded by various housing finance schemes offered by these banks and financial
institutions and the ultimate beneficiaries are the consumers as they have got plenty of
options to choose from according to their requirements.
The immediate impact of rising competition in the housing loan sector can be seen in
the rates of interest charged by various HFCs. Most of the HFCs and financial
institutions are offering housing loans at competitive interest rates and innovative
house loan products. The standard interest rate in the market today is 8 to 8.5% per
annum for a five-year loan. However, the terms and conditions for housing loans
differ from one HFCs to the other.
Housing loans in India are available for a number of reasons such as purchase,
construction, expansion and renovation of house. So housing finance companies now
offer individuals with various alternatives to choose from while taking a Home loan.
They offer loans for property investment like home purchase, home construction, and
home improvement, and home extension, home equity and home conversion. Other
housing loans offered by them are land purchase loan, stamp duty loan, balance
transfer loan, refinance loan and others.
Generally Housing Finance Companies provide following types of loan
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Home Equity Loans: A form of finance to the customer by way of mortgage of

existing property to the financier for taking a loan for some other purpose. The current
market value of the property is the basis for providing home equity loans.
Home Extension Loans: The purpose of this loan is the extension of existing houses
take the addition of rooms, toilet facilities etc. Such loans fall under the category of
home loans.
Home Improvement Loans: These loans are provided mainly for repairs and
maintenance of existing houses- These could include internal and external repairing,
waterproofing and roofing, complete interior renovation, tiling and flooring etc.
Home Purchase Loans: Finance provided for the purchase of ready-made houses.
Land Purchase Loans: These loans are being provided for the purchase of land to the
purpose of construction of residential houses.
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5.2 COMPARISONS OF HOME LOAN SCHEMES
(a) Comparison of Eligibility Criteria of AGE , INCOME and WORK

EXPERIENCE for Salaried and Self Employed person for Selected Housing
Table 5.1
Comparison of Eligibility Criteria of AGE ,INCOME and WORK EXPERIENCE for Salaried
and Self Employed person for Selected Housing Finance Companies of India
AGE INCOME Rs. Work Experience
(Years) (Per Annum) (In Years)
Company
Salarie Self Salaried Self Salaried Self
d Employed Employed Employed
Can Fin 21-58 21-58 N.A. N.A. 3 2
DHFL 21-55 21-55 1,44,000 1,50,000 3 N.A.
GIC 18-60 18-65 N.A. N.A. 2 3
Gruh Fin 18-65 18-65 N.A. N.A. 2 2
HDFC 21-65 21-65 1,20,000 1,50,000 3 3
India HL 21-60 21-60 1,20,000 1,50,000 2 2
India bulls 21-65 21-65 N.A. N.A. N.A. N.A.
LICHF 18-60 18-60 1,80,000 2,00,000 2 3
REPCO 18-65 18-65 N.A. N.A. N.A. N.A.
SAHARA 18-65 18-65 1,20,000 1,50,000 3 3
SHRISTI IS 21-65 21-65 1,44,000 2,00,000 2 N.A.
VAXHF 21-60 21-65 1,20,000 1,50,000 N.A. N.A.
Source: (i) Offer document (ii) Websites of respective companies (iii) bankbazar.com (iv) deal4loan.com
From the above table it is found that Minimum Age limit for selected housing finance
companies of India is ranging between 18-21 Years while Maximum age Limit is
ranging between 50-65 Years for salaried and self-employed person.
Minimum Income eligibility for salaried person is ranging between 1,20,000 to

1,80,000 p.a. but most of housing finance companies asking it for 1,20,000 Rs. p.a.
while Income criteria for Self-employed person is ranging between 1,50,000 to
2,00,000 some housing finance company is considering Income criteria of the
applicant depending upon real time terms of the loan agreement hence it is mentioned
as Not Applicable.
Eligibility criteria for work experience for salaried person is ranging between 2 to 3
years while for self-employed person it is between 2 to 3 years some housing finance
companies considering it on real time application hence it is mentioned as Not
Applicable.
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(b) Comparison of Eligibility Criteria of LOAN Amount, LOAN tenure and

FINANCE Percentage for Selected Housing Finance Companies of India
Table 5.2
Comparison of Eligibility Criteria of LOAN Amount ,LOAN tenure and FINANCE Percentage
for Selected Housing Finance Companies of India
LOAN AMOUNT LOAN TENURE Maximum Amount of
Company (In Lac Rs.) (In Years) Percentage Finance
Minimum Maximum Minimum Maximum Maximum (%)
Can Fin 1 50 5 30 75
DHFL 2 500 15 20 80
GIC 2 100 15 20 85
Gruh Fin 1 50 15 20 85
HDFC 2 100 5 20 85
India HL 1 50 5 25 85
India bulls 1 50 5 25 85
LICHF 5 100 5 20 85
REPCO 1 50 15 20 85
SAHARA 2 500 5 20 85
SHRISTIIS 1 100 15 25 85
VAXHF 1 50 5 25 85
From the above table it is found that Minimum Loan Amount sanctioned by selected
housing finance companies of India is ranging between Rs. 1-5 Lacs while Maximum
Loan Amount sanctioned is ranging between Rs.50 Lacs to Rs. 5 Cr. offer documents
of Most of the housing finance companies are showing real time condition for
sanctioning the loan for salaried and self-employed person separately.
Minimum Loan tenure of the selected housing finance companies are ranging between
5 years to 15 years while it is 20 to 25 years for Maximum Loan tenure of the selected
housing finance companies and this period is depending upon the size of the sanction
loan and loan agreement depending upon the agreement deed of the respective
applicant.
Eligibility criteria for sanctioning loan amount is ranging between 80-85 percentage
of Agreement value but most of selected housing finance companies are offering 85
% of the Agreement Value.
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(c) Comparison of Types of Various Housing Loan Scheme for Selected Housing
Table 5.3
TYPES OF VARIOUS HOUSING LOAN SCHEME OF SELECTED
HOUSING FINANCE COMPANIES OF INDIA
Non
Plot Flat Loan
Company construction
purchase
Renovation Extension
Purchase
Resident NRI
Transfer
Other
purpose
Can Fin - - -
DHFL
GIC - - - -
Gruh Fin - - -
HDFC
India HL - - -
India bulls - - -
LICHF
REPCO - - - -
SAHARA
SHRISTIIS - -
VAXHF - -
It is evidently clear from the above table that most of the selected Housing Finance
Companies are providing loan for construction while from the available data it is found
that Housing Finance Company who provides the loan for construction may not provide
the loan for purchasing the plot. The entire selected Housing Finance Companies
providing loan for renovation and extension. From the observation of the available data it
is found that excepting GIC all the selected housing finance companies are providing loan
for purchase the flat. Only DHFL, HDFC, LICHF and SAHARA is found from the
available records that they are doing the transaction with NRI. Except GIC all the banks
are doing the business of Loan Transfer from existing Loan Scheme with another
Companies or Banks, Likewise, the entire selected research unit is also providing the loan
for other purposes related to housing finance schemes.
(d) Comparison of Processing Fees for Selected Housing Finance Companies of

India
Most of the housing finance companies charge the processing fee. Processing fees
means charge involved in the processing of loan application. Due to competition some
institutions waive the processing fees. Details information about processing fee has
been presented in following table.
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CHAPTER 5
Table 5.4
Comparison of Processing Fees for Selected Housing Finance Companies of India
Housing Finance
Processing Fees
Companies
Can Fin 0.75%
DHFL Loan up to 30 Lac Rs. 5000 + Doc Charges+ Taxes
Loan above 30 Lac and up to Rs. 75 Lac Rs. 10,000 + Doc
Charges + Taxes
Loan above Rs 75 Lacs Rs. 20,000 + Doc Charges + Taxes
GIC 0.3% for loan up to 2 Lacs or 0.8% for loans above RS. 2 Lacs
(subject to minimum of RS. 250)
Gruh Fin 0.25 % To 1.0 %
HDFC 0.50% or Rs. 10,000 whichever is lower
India HL 0.50%
India bulls Nil
LICHF Rs. 1,000 To Rs. 15,000 one time
REPCO 0.50% to 1,0 %
SAHARA Home Loan with loan ticket of up to Rs.5 Lacs: @ 1.25% plus
applicable ST, subject to minimum fees of Rs.2500/- (Rs.2000/-
for Sahara employees) plus applicable ST;
Home Loan with loan ticket of above Rs.5 Lacs: @ 1% plus
applicable ST;
Mortgage Loan (any amount): @1.5% plus applicable ST,
subject to minimum fees of Rs.2500/- (Rs.2000/- for Sahara
employees) plus applicable ST;
NRP Loan (any amount): @ 1% plus applicable ST, subject to
minimum fees of Rs.2500/- (Rs.2000/- for Sahara employees)
plus applicable ST;
SHRISTI IS 0.5% to 1.0 %
VAXHF 1.0%
From the above table it is evident that processing Fees are varying company to
company and observing the offer document and website of respective company it also
suggest that amount of processing fees depends up on the loan amount, tenure of loan
and repayment capacity of the borrower. Some Housing Finance Companies Like
DHFL, LICHF, and SAHARA is charging one time processing fees depending upon
the loan amount while most of Housing Finance Companies are charging some
percentage of loan amount.
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(e) Comparison of Administrative and Commitment charges for Selected

Housing finance companies charge to the customers for the service provided during
the loan period in the form of administrative charges. It also varies from housing
finance agency to agency. Commitment charges means once the loan is sanctioned
and borrower does not avail this loan, housing agency will charge some amount for
blocking of their money, it is known as commitment charges, only very few housing
agencies charge the commitment charges. Detail and exact picture has shown in the
table given below.
Table 5.5
Comparison of Administrative and Commitment charges for Selected Housing
Companies Administrative and Commitment Charges
Can Fin 0.5% to 1 %
DHFL 1%
GIC 1% of loan(subject to a minimum of Rs. 250), commitment fees @ 1% per
annum on the in drawn amount of the loan, commencing nine months from
the date of acceptance of the loan till the same is fully availed of.
Gruh Fin 0.25 % To 1.0 %
HDFC 0.50% or 1%
India HL 0.50% to 1 %
India bulls Nil
LICHF 1%
REPCO 0.50%
SAHARA 0.5% to 1%
SHRISTI IS Nil
VAXHF Nil
From the above table it is evident that most of Selected Housing Finance Companies
are charging Administrative charges ranging between 0.5% to 1%.
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(f) Comparison of Security of loan for Selected Housing Finance Companies

of India
Security of loan is taken by every Housing Finance Companies but it varies from the
Company to Company in term of different security some Housing Finance Company
require the additional security like the marketable security, guarantee of other person,
etc. It also depends on the management policy of the particular individual company.
Following table is showing the scenario of security of loan for selected housing finance
companies of India.
Table 5.6
Comparison of Security of loan for Selected Housing Finance Companies of India
Companies Security of Loan
Can Fin First mortgage of the property, generally by deposit of title deed with Can
Fin Home Ltd. Guarantors based on assessment, also on second mortgage in
case of government and public sector undertaking employees.
DHFL First Mortgage of Property and other collateral security as necessary to
DHFL may also be required.
GIC Primary security would be the mortgage of the property proposed to be
financed by GIC. Depending on the risk assessment, other collateral security
in the form of LIC policies, NSCs, FDs, other immovable property, personal
guarantee may be required.
Gruh Fin The Loan would be secured by creating first mortgage of the property
financed in GRUH’s favor by way of deposit of title deeds. Besides this, the
loan would be secured by one or more personal guarantees as applicable.
Another securities as acceptable to GRUH may also be required. It would be
the applicant’s responsibility to ensure that the title to the property is
absolutely clear and marketable and free from any encumbrances. for this
purpose a Title Clearance Certificate (TCC) from an advocate would have to
be submitted to GRUH.
HDFC First mortgage of the property, the other collateral security, guarantees from
sound and solvent guarantors, pledge of shares and such other investments
that are acceptable to HDFC.
India HL First Mortgage of Property & Equated mortgage, Guarantee of a third party
India bulls First Mortgage of Property and Guarantee of a third party
LICHF Deposit of title deeds of the property, LIC policy, Equivalent to the loan
value (except Grah Lakshmi) One guarantor less than 50 years age.
REPCO Collateral Securities in addition to primary security is taken by the REPCO,
which may be in the form of guarantee from one or two persons, assignment
of LIC policies, deposit of shares and units or other securities.
SAHARA Equitable mortgage, mortgage by entering into a memorandum of Entry and
Registered Mortgage or English Mortgage. SAHARA follows any of the
three mortgages in addition to primary security.
SHRISTI IS First Mortgage of Property & Equated mortgage, Guarantee of a third party
VAXHF First Mortgage of Property & Equated mortgage, Guarantee of a third party
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Most of the selected Housing Finance Companies asking either Equitable Mortgage
and Guarantee of third party in addition to primary Mortgage before sanctioning the
loan. GIC, HDFC and REPCO accepting collateral Security like any financial
instrument in addition to primary security before sanctioning the loan.
(g) Comparison of Sanctioning Period for Selected Housing Finance Companies

of India
Every Housing Finance Companies has different period for sanctioning the loan. It
also varies from Company to Company. Minimum sanctioning period is fixed by the
management to see the liquidity position and sources of fund, Capital structure etc. It
varies from the same day to 7-15 days. Following table is showing the scenario of
Sanctioning period for the selected housing finance Companies.
Table 5.7
Comparison of Sanctioning Period for Selected Housing Finance
Companies of India
Companies Sanctioning Period
Can Fin 7 Days
DHFL About 3-15 days, subject to proper documentation
provided by the Home loan applicant.
GIC 7-15 Days
Gruh Fin Same Day subject to proper documentation provided
by the Home loan applicant.
HDFC Same Day subject to proper documentation provided
India HL 7 Days subject to proper documentation provided by
the Home loan applicant.
India bulls Same Day subject to proper documentation provided
LICHF 8 Working Days
REPCO Same Day subject to proper documentation provided
SAHARA 7-15 Days
SHRISTI IS Same Day subject to proper documentation provided
VAXHF Same Day subject to proper documentation provided
Source: (i) Offer document (ii) Websites of respective companies (iii) bankbazar.com (iv)
deal4loan.com
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Most of the Housing Finance companies asking time to sanction the loan is varying
between 7-15 days. Some of the Selected Housing Finance Companies are sanctioning
the loan on same day subject to proper documentation provided by the applicant.
(h) Comparison of Disbursement period for Selected Housing Finance

Companies of India
Housing Finance Companies have different disbursement period for the loan, as per
the organization’s rules and regulations. It effects the operation of the business.
Disbursement period varies from same day to 45 days from the date of sanctioning of
the loan. Following table are exhibits the present scenario of selected housing finance
companies regarding the disbursement period of loan.
Table 5.8
Comparison of Disbursement Period for Selected Housing Finance
Companies of India
Companies Disbursement Period
Can Fin 30-35 Days
DHFL About 40-45 days
GIC 30-45 Days
Gruh Fin 30 Days
HDFC 7-15 Days
India HL 7 Days
India bulls Same Day subject to proper documentation provided
by the Home loan applicant and sanction by the
sanctioning authority
LICHF 45 Working Days
REPCO 15-30 Days
SAHARA 7-15 Days
SHRISTI IS 7-15 Days
VAXHF 15-45 Days
deal4loan.com
15 Days to 45 Days is taken for disbursement of the loan after sanctioning procedure.
Most of the Selected Housing Finance Companies generally disburse the loan within a
period of average thirty days .
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(i) Comparison of Insurance required for Selected Housing Finance

Companies of India
Insurance is also important criteria for the operational aspect. Most of the Housing
Finance Companies have made compulsory insurance of the property as well as
borrowers but it vary in terms that individual insurance or comprehensive insurance
required.
Table 5.9
Comparison of Insurance required for Selected Housing Finance
Companies of India
Companies Insurance requirement
Can Fin Yes
DHFL Yes Insurance against Fire
GIC Yes, free accidental death insurance cover to all
borrowers to the extent of loan outstanding as per
policy conditions.
Gruh Fin Yes
HDFC Yes, property should duly and properly insured for
fire and other appropriate hazards, as required by
HDFC's during the pendency of the loan and to
produce evidence there of the HDFC
India HL Yes, free personal accident and property insurance.
India bulls Yes
LICHF Yes, free accidental death insurance cover to all
borrowers to the extent of loan outstanding as per
policy conditions.
REPCO Yes, comprehensive joint name policy.
SAHARA Yes
SHRISTI IS Yes
VAXHF Yes, comprehensive joint name policy.
deal4loan.com
Insurance of any property is now a day is essential as per the Risk Management
policy. There are various Risk involves in any financial matters. Providing Housing
Loan is long term financial disbursement therefore it is essential to plan the Risk
Management and hence all the Housing Finance Companies are asking for Insurance
of the related property.
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(j) Comparison of Penalty for Pre-Payment for Selected Housing Finance

Companies of India
Penalty for pre-payment means company charges a penalty if borrower returns the
loan amount before the stipulated time in part or full. At present most of the housing
finance companies do not charge the pre-payment charges due to competition, but a
some Housing Finance Companies are continuing the pre-payment charge because it
hinder the financial planning of the institutions. Below table exhibit the true picture
about the penalty for pre-payment.
Table 5.10
Comparison of Penalty for Pre-
Payment for Selected Housing Finance
Companies of India
Penalty for Pre-
Companies
Payment
Can Fin Nil
DHFL Nil
GIC Nil
Gruh Fin Nil
HDFC 2%
India HL 1%
India bulls Nil
LICHF 1.5%
REPCO Nil
SAHARA 0.5%
SHRISTI IS Nil
VAXHF Nil
Source: (i) Offer document (ii) Websites of
respective companies (iii) bankbazar.com (iv)
deal4loan.com
Penalty for pre-payment is not asking by most of Housing Finance Companies now a
days due to competition but some of Housing Finance Companies like LICHF,
SAHARA and HDFC are asking nominal rate of pre-payment penalty due to the part
of their administrative procedure.
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(k) Comparison of Home Loan Interest Rate for Selected Housing Finance
Companies of India
New players are always entered in any industry, Likewise, New players also have
taken place in the Housing Finance Industry as well as Current player also have
expand their area of business. Therefore it is essential for customers to study various
market loan schemes and choose the best financing facility. There is a great need to
choose a banking institute providing the most affordable loan facilities. This all helps
ward-off chances of any kind of fraud and to getting transparent deals.
Interest rates of different Housing Finance Companies have been changing very
quickly during the last three years of period. Changes are so quick even within the 15
days to one month interest rates are changing. Researcher is presenting the current
data as on March 2010. As on March 2010 it is vary from 8 % to 16% fixed basis and
from 8% to 10.5 %at the floating basis for the different schemes for different Housing
Finance Companies. Generally different in rate of interest varies from 0.5% to 2.5%
for the different housing finance companies. Interest rates are going down day by day
due to sever competition in the market and there is interest war in the market if one
housing finance company lowering down interest rate, other company announces in
the next day. After entry of commercial banks in the housing finance sector,
competition is in the war foot ground and every financial institution comes after the
housing finance sector because of potential market in the housing sector and changes
in the rules and regulation of RBI towards CRR and SLR.
Following table is showing the Comparative Interest Rate of Selected Housing

Finance Companies on the base of Home Loan Amount
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CHAPTER 5
Table 5.11
Comparative Interest Rate of Selected Housing Finance Companies of India on
the base of Home Loan Amount
(March 2010 w.e.f. August 2009)
Housing Interest Rates for various Loan amount
Finance Interest Type up to 5 5-20 20-30 30-50 50-75 more than
Company lakh lakh lakh lakh lakh 75 lakh
CAN FIN Floating ** 8.75 8.75 9.0 9.75 9.75 9.75
Homes Fixed 11 11 11 11.25 11.25 11.25
Floating 9.25 9.25 10.75 10.75 10.75 10.75
DHFL
Fixed 13.25 13.25 14.75 14.75 14.75 14.75
Floating 10.5 10.5 10.5 10.5 10.5 10.5
GIC
Fixed@ 15.0 15.0 15.0 15.0 15.0 15.0
Floating 9.0 9.0 9.0 9.0 9.0 9.0
GRUH Finance
Fixed 10.25 10.25 10.25 10.25 10.75 10.75
Floating 8.75 8.75 8.75 9 9.25 9.25
HDFC Fixed 14.25 14.25 14.25 14.25 14.25 14.25
HDFC-Special
8.25 8.25 8.25 8.25 8.25 8.25
Scheme Floating
Floating 9.5 9.5 10.0 10.0 10.0 10.0
INDIA HL
Fixed@ 13.0 13.0 13.0 13.0 13.0 13.0
Floating 8.75 8.75 8.75 9.0 9.5 9.5
India bulls Special
INDIA BULLS 8.25 8.25 8.25 N.A. N.A. N.A.
Scheme -Floating
Fixed 16.0 16.0 16.0 16.0 16.0 16.0
LIC HF Floating 9.75 9.75 9.75 9.75 9.75 9.75
LIC Fix -o-Floaty* 8.9 8.9 8.9 8.9 8.9 8.9
Floating 9.0 9.0 9.0 9.0 9.0 9.0
REPCO
Fixed 14.0 14.0 14.0 14.0 14.0 14.0
SAHARA-Floating 9.75 9.75 9.75 10.25 10.25 10.25
SAHARA
SAHARA Fix 11 11 11 11 11 11
Home Loan –
9.25 9.25 9.25 9.25 9.5 9.5
SHRISTI IS Floating#
Home Loan -Fixed 11.0 11.0 11.0 11.0 11.0 11.0
Floating 9.5 9.5 10.0 10.0 10.0 10.0
VAXHF
Fixed 14.25 14.25 14.25 14.25 14.25 14.25
* LIC offers 8.9% fixed for first 3 yrs thereafter then prevailing floating rate will be applicable.
** Floating interest rate is linked to HDFC's Retail Prime Lending Rate (RPLR) currently 13.75%.
# The Floating interest rate is linked to Shristi Infra Structure Prime Lending Rate (BPLR) currently 11.75%.
@ Fixed rates may be reset at the end of every 3 years on the basis of the prevailing interest rate.
From the above table it is evident that fixes as well as floating Rate of Interest is varies on the
base of loan amount for most of the selected housing finance companies. Fixed Interest Rate
is higher compare to floating Interest Rate in most of the selected housing finance companies
during study period. Some of selected housing finance companies are offering special scheme
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for floating interest rate. Lowest Interest rate for special scheme is offered by HDFC during
study period which is 8.25 %. Highest fixed rate of interest charges by India Bulls which is
16% during study period.
(l) Comparison of Home Loan Sanction, Disbursement and percentage of

Disbursement to Sanction Loan for Selected Housing Finance
Companies of India
Table 5.12
Comparison of Home Loan Sanction, Disbursement and percentage of Disbursement to Sanction Loan for
Selected Housing Finance Companies of India
A = Sanction; B = Disbursement; C = [(Disbursement/Sanction) * 100]
Year Average
Company
07-08 08-09 09-10 10-11 11-12 12-13 13-14 14-15 (%)
(A) 264 356 653 546 1105 2093 2907 3670

CANFIN (B) 247 301 547 473 859 1814 2548 3346 86.47
(C) 93.56 84.55 83.77 86.63 77.74 86.67 87.65 91.17
(A) 2009 2698 5274 8949 12845 17337 22377 28497
DHFL (B) 1761 2266 3865 6505 9065 13357 16647 19821 76.15
(C) 87.66 83.99 73.28 72.69 70.57 77.04 74.39 69.55
(A) 871 920 980 1069 1072 1424 1754 2305
GIC (B) 785 835 905 969 992 1353 1665 2225 92.86
(C) 90.13 90.76 92.35 90.65 92.54 95.01 94.93 96.53
(A) 869 928 1012 1628 2029 2797 3068 3561
GRUH (B) 632 655 780 1211 1487 2174 2577 3121 77.17
(C) 72.69 70.57 77.04 74.39 73.28 77.74 83.99 87.66
(A) 75949 91378 108268 129274 155431 187010 217763 253333
HDFC (B) 73328 85198 97967 117127 140875 170046 197100 228181 91.63
(C) 96.55 93.24 90.49 90.60 90.64 90.93 90.51 90.07
(A) 489 487 556 721 600 915 1496 2248
INDIA HL (B) 429 435 477 596 532 743 1211 1948 80.65
(C) 87.73 89.32 85.79 82.66 74.93 74.93 74.93 74.93
(A) 13862 10099 12163 13501 14754 16624 19762 20511
INDIA
(B) 5921 3767 3452 3754 4020 3098 5105 6905 30.20
BULLS
(C) 42.71 37.30 28.38 27.81 27.25 18.64 25.83 33.66
(A) 5209 5027 6105.42 8617.88 10898 18043 22603 22034
LICHF (B) 4650 4670 5121.36 7071.48 8762 14852 19912 20027 86.22
(C) 89.27 92.89 83.88 82.06 80.40 82.31 88.09 90.89
(A) 402 473 649 991.8 1111.6 1284.8 1822.5 2398.9
REPCO (B) 380 428 583 915.6 1042.3 1167.4 17.15.3 2181.2 92.10
(C) 94.53 90.49 89.83 92.32 93.77 90.86 94.12 90.93
(A) 22345 28100 27582 24476 21195 45095 37528 38446
SAHARA (B) 20829 25950 21219 22191 18912 40395 34362 35522 89.50
(C) 93.22 92.35 76.93 90.66 89.23 89.59 91.56 92.39
(A) 6667 8900 7913 8141 15627 13415 13862 10099
SHRISTI IS (B) 3201 4373 4829 4662 8180 6136 5921 3767 49.19
(C) 48.01 49.13 61.03 57.27 52.35 45.74 42.71 37.30
(A) 356 476 489 487 556 721 600 915
VAXHF (B) 236 370 429 435 477 596 532 743 81.20
(C) 66.29 77.73 87.73 89.32 85.79 82.66 88.67 81.20
From the above table it is clear that lowest disbursement ratio is found in India Bulls with
average 30 % during Study Period followed by SHRISTI Infra Structure with average 49
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percent while highest Average disbursement ratio is 92.86% for GIC during study period
followed by REPCO with average 92.10%. Most of HFCs are providing average 85%
disbursement of the sanctioned loan.
5.3 FINANCIAL DATA ANALYSIS
Housing finance strategies vary from country to country, and depend on overall levels
of internal economic, social, and political development. Natural disasters and human
conflicts, however, know no borders. When confronted with either, developed
countries assumedly have institutions and resources to deal with short-term relief,
mid-term recovery, and long-term solvency and prevention. Developing countries,
however, may have neither. The analysis of performance evaluation of selected
housing finance companies of India presented here will seek to fill the gaps posed by
these discrepancies.
Performance Evaluation is closely related to the surety of the working system of a

company as a whole. “Efficiency is a technique to evaluate past, current and projected
performance of a concern – Sudha Nigam.” It is a powerful applied tool to examine,
to measure to interpret and to weigh critically and draw outputs.
Financial Performance of an organization is based on following basic four parameters
1) How liquid is the firm?

2) Is management generating adequate operating profits on the firm’s assets?
3) How is the firm financing its assets?
4) Are the stockholders receiving an adequate return on their investment?
In the Present Study researcher have focus on this basic parameter for to evaluate the
financial performance
There are so many different methods, strategies and processes in evaluation that it can
be hard to work which one to choose for an evaluation. Following figure highlights
the system of evaluation.
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Figure 5.1 Performance Evaluation
Present study is for Housing finance Industry who has more concern with finance,
hence researcher have taken special care to consider the evaluation system in such a
way which focus on evaluate the performance of financial segment.
FINANCIAL PERFORMANCE EVALUATION
Financial Performance is the snapshot of a position of concern and ability to

withstand the ever-changing environment. It is the blueprint of the financial affair of
the concern and reveals how a business has prospered under the leadership of a
management personnel. In fact, it can be said that financial Performance is the
medium of evaluation of management efficiency.
The overall object of business is to earn satisfactory returns on the funds Invest in it.
Consistent with maintaining a sound financial position, an evaluation of such
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performance is done in order to measure the efficiency of operations or profitability of

the organization and to appraise the financial strength as compared with a similarly
situated concern.
Thus, financial Performance is generally directed towards evaluating the Liquidity,

stability and profitability of a concern which put together symbolize the financial
Performance of a concern.
Present Study is based on following parameters
Table 5.13
Category and Parameters
Sr. Category Parameter
No.
A Profitability & (a) Net Profit (Net Income) Margin
Efficiency (b) Asset Turnover Ratio
Criteria
B Return (a) Return on Net Worth

(b) Return on Capital Employed
(c) Return on Assets
C Per Share (a) Basic EPS

Return (b)Funds from operation per share
D Liquidity (a) Current Ratio

(b) Dividend Pay-out Ratio
(c) Debt Equity Ratio
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[A] PROFITABILITY AND EFFICIENCY CRITERIA ANALYSIS
Profitability is the primary goal of all business ventures. Without profitability the
business will not survive in the long run. So measuring current and past profitability
and projecting future profitability is very important.
Profitability is measured with income and expenses. Income is money generated from
the activities of the business. For example, if crops and livestock are produced and
sold, income is generated. However, money coming into the business from activities
like borrowing money does not create income. This is simply a cash transaction
between the business and the lender to generate cash for operating the business or
buying assets.
Expenses are the cost of resources used up or consumed by the activities of the
business. For example, seed corn is an expense of a farm business because it is used
up in the production process. A resource such as a machine whose useful life is more
than one year is used up over a period of years. Repayment of a loan is not an
expense; it is merely a cash transfer between the business and the lender.
Profitability is measured with an “income statement”. This is essentially a listing of

income and expenses during a period of time (usually a year) for the entire
business. Information File about Net worth Statement includes - a simple income
statement analysis. An Income Statement is traditionally used to measure profitability
of the business for the past accounting period. However, a “pro forma income
statement” measures projected profitability of the business for the upcoming
accounting period. A budget may be used when you want to project profitability for a
particular project or a portion of a business.
Reasons for Computing Profitability
Whether organization are recording profitability for the past period or projecting
profitability for the upcoming period, measuring profitability is the most important
measure of the success of the business. A business that is not profitable cannot
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survive. Conversely, a business that is highly profitable has the ability to reward its
owners with a large return on their investment.
Increasing profitability is one of the most important tasks of the business managers.
Managers constantly look for ways to change the business to improve profitability.
These potential changes can be analysed with a pro forma income statement or
a Partial Budget. Partial budgeting allows you to assess the impact on profitability of
a small or incremental change in the business before it is implemented.
A variety of Profitability Ratios (Decision Tool) can be used to assess the financial
health of a business. These ratios, created from the income statement, can be
compared with industry benchmarks. Also, Income Statement Trends (Decision Tool)
can be tracked over a period of years to identify emerging problems.
For the present study researcher have considered the three parameters to measure the
profitability
(a) Net Profit (Net Income) Margin
Net income is a company’s profit in a given fiscal period. It consists of total revenues
earned in the period less total expenses incurred to generate the revenues in the
period. When revenues exceed expenses, the company has a net profit. When
expenses exceed revenues, the company has a net loss. Net income is reported on a
company’s income statement. It is an important measure of a company’s profitability
and financial performance for the relevant fiscal period. Net income is also called net
earnings, net profit, or the bottom line.
Basically, net income is computed by subtracting all relevant costs and expenses from
total revenue. Start with total revenue, also known as the top line because it is shown
at the top of the income statement, and subtract the costs of sales, operating expenses,
non-operating expenses, and taxes. This gives you net income, also known as the
bottom line because it is shown at the bottom of the income statement.
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Table 5.14
NET PROFIT MARGIN IN PERCENTAGE
Company 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 Average
Can Fin 12.62 14.14 18.33 18.17 15.29 13.78 13.10 10.56 14.50
Dewan 15.83 12.50 14.79 18.29 12.41 10.96 10.64 10.39 13.23
GIC 20.77 18.35 22.76 33.82 13.53 15.39 15.64 14.08 19.29
Gruh Fin 20.99 17.10 22.37 25.34 23.41 22.42 20.92 19.22 21.47
HDFC 29.79 20.88 25.05 27.50 23.78 22.96 22.53 21.86 24.29
India HL 27.07 26.97 157.70 23.26 2.46 26.55 29.57 23.41 39.62
India bulls 70.59 47.48 32.03 12.22 10.43 26.36 28.90 31.66 32.46
LICHF 18.53 18.45 19.15 21.09 14.95 13.50 14.34 12.99 16.63
REPCO 21.90 22.29 26.88 25.78 19.27 19.72 20.61 17.78 21.78
SAHARA 9.82 10.02 12.70 11.23 11.16 10.18 13.24 12.60 11.37
SHRISTIS 7.42 0.71 1.78 3.42 0.66 2.11 1.94 2.14 2.52
VAXHF 99.88 51.42 31.31 9.00 6.15 0.28 0.60 0.65 24.91
Average 29.60 21.69 32.07 19.09 12.79 15.35 16.00 14.78
Source : www.moneycontrol.com
 Analysis for calculated ratio for selected Housing finance companies of India
From the above table it is evident that Highest Net Profit margin is showing for India
Home Loans with 39.62% which is followed by India Bulls with 32.46 % while
lowest is shown by SHRISTI IS during the study period. Highest yearly average is
shown by the year 2009-10 that may due to India Home loan is having highest margin
on that year and average profit margin is reduced nearer 40 to 50 percent from 2009-
10 onwards.
 Graphical Analysis
Chart 5.1
Average of Net Profit Margin of Selected Housing Finance
Companies from 2007-08 to 2014-15
50.00
40.00
30.00
20.00
10.00
0.00
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From the above Graph it is evident that Highest Net Profit margin is showing for
India Home Loans with 39.62% which is followed by India Bulls with 32.46 % while
lowest is shown by SHRISTI IS during the study period.
 Statistical Analysis
Table 5.15
“F”-Test TWO Way ANOVA for Ratio of Net Profit Margin of Selected
Housing Finance Companies of India From 2007-08 To 2014-15
Ho: All the selected Housing Finance companies of India have equal profitability
Margin during study period.
H1: All the selected Housing Finance companies of India have unequal profitability
Margin during study period.
Source of Variation Sum of Degree Mean Fc Ft
Square of Sum of
Freedom Square
Company 8446.718 11 767.8835 2.43956 1.915305
Year 4297.799 7 613.9713 1.950606 2.13099
Error 24236.46 77 314.7593
Total 95
From the “F” test two way ANOVA Table as calculated above it shows that
calculated value of Fc for company is 2.43956 while tabular value of Ft for Company
is 1.915305 which show that calculated value Fc is greater than tabular value Ft. Fc >
Ft for company, hence Null Hypothesis is rejected and Alternative Hypothesis is
accepted that Profitability for company wise is different for selected Housing finance
companies of India while Year wise calculated value of Fc is 1.950606 and year wise
tabular value of Ft is 2.13099 which show that calculated value Fc is smaller than
tabular value Ft. Fc < Ft for company, hence Null Hypothesis is accepted and
Alternative Hypothesis is rejected that Profitability on year wise is showing equal
norms for selected Housing finance companies of India.
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(b) Asset Turnover Ratio
The asset turnover ratio is an efficiency ratio that measures a company's ability to
generate Business from its assets by comparing net output with average total assets. In
other words, this ratio shows how efficiently a company can use its assets to generate
Business.
The total asset turnover ratio calculates net output as a percentage of assets to show
how many Businesses are generated from each rupee of company assets. For instance,
a Debt Equity ratio of 0.5 that means each rupee of assets generates 50 paisa of
Output Business.
This ratio measures how efficiently a firm uses its assets to generate businesses, so a
higher ratio is always more favourable. Higher turnover ratios mean the company is
using its assets more efficiently. Lower ratios mean that the company isn't using its
assets efficiently and most likely have management or production problems.
Like with most ratios, the asset turnover ratio is based on industry standards. Some
industries use assets more efficiently than others. To get a true sense of how well a
company's assets are being used, it must be compared to other companies in its
industry.
The total asset turnover ratio is a general efficiency ratio that measures how
efficiently a company uses all of its assets. This gives investors and creditors an idea
of how a company is managed and uses its assets to produce products and sales.
Sometimes investors also want to see how companies use more specific assets like
fixed assets and current assets. The fixed asset turnover ratio and the working capital
ratio are turnover ratios similar to the asset turnover ratio that is often used to
calculate the efficiency of these asset classes.
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Table 5.16
ASSET TURNOVER RATIO IN PERCENTAGE
Company 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 Average
Can Fin 11.22 11.42 9.74 10.19 10.53 9.69 9.77 9.79 10.29
Dewan 11.60 10.58 9.86 8.68 11.44 11.51 11.32 10.94 10.74
GIC 10.82 10.63 9.65 9.02 10.18 11.62 11.30 10.87 10.51
Gruh Fin 9.97 11.58 11.54 10.65 11.85 11.61 11.67 11.54 11.30
HDFC 9.67 10.81 9.72 9.23 10.34 10.80 10.69 10.78 10.26
India HL 12.36 10.52 5.18 5.26 10.33 10.14 12.75 10.74 9.66
India bulls 1.64 33.19 19.36 18.62 12.28 12.08 12.12 11.33 15.08
LICHF 8.94 9.80 8.58 8.79 9.49 9.40 9.58 9.48 9.26
REPCO 9.46 10.92 11.02 10.75 11.17 10.69 11.27 11.39 10.83
SAHARA 8.67 12.92 11.59 12.57 12.37 10.73 11.37 10.68 11.36
SHRISTI 71.64 45.51 43.70 34.44 40.25 36.03 38.82 35.05 43.18
IS
VAXHF 10.65 4.30 6.33 115.48 16.66 33.30 17.06 20.96 28.08
Average 14.72 15.18 13.02 21.14 13.91 14.80 13.98 13.63
From the above table it is evident that Highest Average Asset Turnover Ratio is
showing for SHRISTI IS with 43.18% which is followed by VAXHF with 28.08 %
while lowest is shown by LIC Housing Finance with 9.26% during the study period.
Highest yearly average is shown for the year 2010-11 that may due to VAXHF is
having highest Asset Turnover Ratio for that year.
Chart 5.2
Average of Asset Turnover Ratio of Selected Housing Finance
Companies from 2007-08 to 2014-15
50.00
40.00
30.00
20.00
10.00
0.00
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From the above Graph it is evident that Highest Average Asset Turnover Ratio is
showing for SHRISTI ISwith 43.18% which is followed by VAXHF with 28.08 %
while lowest is shown by LIC Housing Finance with 9.26% during the study period.
Highest yearly average is shown for the year 2010-11 that may due to VAXHF is
having highest Asset Turnover Ratio for that year.
Table 5.17
“F”-Test TWO Way ANOVA for Asset Turnover Ratio of Selected Housing
Finance Companies of India From 2007-08 To 2014-15
Ho: All the selected Housing Finance companies of India have equal Asset
Turnover Ratio during study period.
H1: All the selected Housing Finance companies of India have unequal Asset
Turnover Ratio during study period.
Square of Sum of
Freedom Square
Company 9233.733 11 839.4302 6.171215 1.915305
Year 550.3638 7 78.6234 0.578013 2.13099
Error 10473.81 77 136.0235
Total 95
accepted that Asset Turnover Ratio for company wise is different for selected
Housing finance companies of India while Year wise calculated value of Fc is
0.578013 and year wise tabular value of Ft is 2.13099 which show that calculated
value Fc is smaller than tabular value Ft. Fc < Ft for year base, hence Null Hypothesis
is accepted and Alternative Hypothesis is rejected that Asset Turnover on year wise is
showing equal norms for selected Housing finance companies of India.
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[B] RETURN BASE ANALYSIS
Return base analysis is basically a part of profitability analysis. Income generated

after disbursement by the organization is analysed on the base of various parameters
is called as return base analysis. For the present Study the researcher have considered
three parameter for the study they are as (i) Return on Net Worth (ii) Return on
Capital Employed and (iii) Return on Asset.
(a) Return on Net Worth

The net worth ratio states the return that shareholders could receive on their
investment in a company, if all of the profit earned were to be passed through directly
to them. Thus, the ratio is developed from the perspective of the shareholder, not the
company, and is used to analyse investor returns.
The ratio is useful as a measure of how well a company is utilizing the shareholder
investment to create returns for them, and can be used for comparison purposes with
competitors in the same industry.
To calculate the return on net worth, first compile the net profit generated by the
company. The profit figure used should have all financing costs and taxes deducted
from it, so that it accurately reflects the profit available to shareholders. This is the
numerator in the formula. Next, add together the capital contributions made by
shareholders, as well as all retained earnings; this is the denominator in the formula.
An excessively high net worth ratio may indicate that a company is funding its
operations with a disproportionate amount of debt and trade payables. If so, a decline
in its business could result in the inability to pay back the debt, which increases the
risk of bankruptcy; this means that the shareholders may lose their investment in the
company. Thus, an investor relying upon this measurement should also examine
company debt levels to see how excessive returns are being generated.
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Table 5.18
RETURN ON NET WORTH (EQUITY) IN PERCENTAGE
Company 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 Average
Can Fin 12.72 12.79 14.25 13.51 12.59 13.80 16.73 11.17 13.45
Dewan 18.85 18.99 16.69 17.12 15.07 13.96 14.79 13.40 16.11
GIC 17.82 16.37 17.33 24.39 11.87 15.43 15.97 15.59 16.85
Gruh Fin 22.25 22.76 26.05 28.78 31.21 29.71 29.14 28.64 27.32
HDFC 20.39 17.43 18.69 20.41 21.67 19.52 19.46 19.34 19.61
India HL 3.63 2.85 11.22 1.27 0.29 2.71 3.78 3.25 3.63
India bulls 1.16 20.92 17.83 6.64 5.18 24.86 27.61 30.47 16.83
LICHF 21.13 23.79 19.54 23.37 16.08 15.78 17.48 17.72 19.36
REPCO 16.31 22.51 23.08 23.47 20.26 12.61 14.85 15.15 18.53
SAHARA 6.02 8.48 9.71 8.99 8.09 6.82 8.24 6.92 7.91
SHRISTI 22.21 2.24 1.68 3.67 0.85 2.44 2.36 2.17 4.70
IS
VAXHF 16.21 2.61 2.92 12.70 1.15 0.09 0.10 0.14 4.49
Average 14.89 14.31 14.92 15.32 12.03 13.14 14.21 13.66
From the above table it is evident that Highest Return on Net worth in percentage is
showing for Gruh Finance with Average 27.32% which is followed by HDFC with an
Average of 19.61% and LIC Housing finance with an average of 19.36% while lowest
is shown by VAXHF with an average of 4.49% during the study period. Highest
yearly average is shown by the year 2010-11with an Average of 15.32% but
throughout the research period yearly average is maintaining between 12 to 15%.
Chart 5.3
Average of Return on Net Worth of Selected Housing
Finance Companies from 2007-08 To 2014-15
30.00
25.00
20.00
15.00
10.00
5.00
0.00
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From the above graph it is evident that Highest Return on Net worth in percentage is
showing for Gruh Finance with Average 27.32% which is followed by HDFC with an
Average of 19.61% and LIC Housing finance with an average of 19.36% while lowest
is shown by VAXHF with an average of 4.49% during the study period.
Table 5.19
“F”-Test TWO Way ANOVA for Ratio of Return on Net worth of Selected
Ho: All the selected Housing Finance companies of India have equal Return on Net
worth during study period.
H1: All the selected Housing Finance companies of India have unequal Return on
Net worth during study period.
Square of Sum of
Freedom Square
Company 4804.772 11 436.7975 17.58195 1.915305
Year 100.001 7 14.28586 0.575034 2.13099
Error 1912.951 77 24.84352
Total 6817.724 95
accepted that Return on Net worth for company wise is different for selected Housing
finance companies of India while Year wise calculated value of Fc is 0.575034 and
year wise tabular value of Ft is 2.13099 which show that calculated value Fc is
smaller than tabular value Ft. Fc < Ft for company, hence Null Hypothesis is accepted
and Alternative Hypothesis is rejected that Return on Net worth on year wise is
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(b) Return on Capital Employed
Return on capital employed or ROCE is a profitability ratio that measures how efficiently
a company can generate profits from its capital employed by comparing net operating
profit to capital employed. In other words, return on capital employed shows investors
how many dollars in profits each dollar of capital employed generates.
ROCE is a long-term profitability ratio because it shows how effectively assets are
performing while taking into consideration long-term financing. This is why ROCE is a
more useful ratio than return on equity to evaluate the longevity of a company.
This ratio is based on two important calculations: operating profit and capital employed.
Net operating profit is often called EBIT or earnings before interest and taxes. EBIT is
often reported on the income statement because it shows the company profits generated
from operations. EBIT can be calculated by adding interest and taxes back into net
income if need be.
Capital employed is a fairly convoluted term because it can be used to refer to many
different financial ratios. Most often capital employed refers to the total assets of a
company less all current liabilities. This could also be looked at as
stockholders' equity less long-term liabilities. Both equal the same figure.
The return on capital employed ratio shows how much profit each dollar of employed
capital generates. Obviously, a higher ratio would be more favourable because it means
that more dollars of profits are generated by each dollar of capital employed.
For instance, a return of 0.2 indicates that for every rupees invested in capital employed,
the company made 20 paisa of profits.
Investors are interested in the ratio to see how efficiently a company uses its capital
employed as well as its long-term financing strategies. Companies' returns should always
be high than the rate at which they are borrowing to fund the assets. If companies borrow
at 10 percent and can only achieve a return of 5 percent, they are losing money.
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Table 5.20
RETURN ON CAPITAL EMPLOYED IN PERCENTAGE
Company 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 Average
Can Fin 1.50 1.67 1.92 2.40 1.96 1.63 1.57 1.36 1.75
Dewan 1.86 1.34 1.48 1.81 1.68 1.50 1.46 1.47 1.58
GIC 17.82 16.37 17.33 3.86 1.70 2.28 2.20 1.97 7.94
Gruh Fin 2.54 2.03 2.66 3.87 3.68 3.42 3.08 2.73 3.00
HDFC 3.08 2.55 2.74 4.38 4.27 4.11 4.59 4.51 3.78
India HL 3.59 2.85 8.27 1.22 0.27 2.70 3.78 2.67 3.17
India bulls 1.16 19.18 7.61 2.42 1.38 5.21 5.86 5.51 6.04
LICHF 1.75 1.96 1.77 2.32 1.72 1.61 1.73 1.53 1.80
REPCO 2.80 2.97 4.01 3.72 2.92 2.81 2.96 2.56 3.09
SAHARA 0.86 1.31 1.50 1.54 1.52 1.20 1.60 1.38 1.36
SHRISTI 22.02 0.99 1.21 3.66 0.85 1.75 1.46 1.82 4.22
IS
VAXHF 16.21 2.61 2.92 12.70 1.15 0.09 0.10 0.14 4.49
Average 6.27 4.65 4.45 3.66 1.93 2.36 2.53 2.30
From the above table it is evident that Highest Return on Capital Employed in
percentage is showing for GIC with Average 7.94% which is followed by India Bulls
with an Average of 6.04% while lowest is shown by SAHARA Housing Finance with
an average of 1.36% during the study period. Highest yearly average is shown by the
year 2007-08 with an Average of 6.27 % that is due to shristi Infrastructure and
VAXHF is having highest average on capital employed in that year.
Chart 5.4
Average of Return on Capital Employed of selected Housing
Finance Companies from 2007-08 to 2014-15
9.00
8.00
7.00
6.00
5.00
4.00
3.00
2.00
1.00
0.00
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From the above Graph it is evident that Highest Return on Capital Employed in
percentage is showing for GIC with Average 7.94% which is followed by India Bulls
with an Average of 6.04% while lowest is shown by SAHARA Housing Finance with
an average of 1.36% during the study period.
Table 5.21
“F”-Test TWO Way ANOVA for Ratio of Return on Capital Employed of
Selected Housing Finance Companies of India From 2007-08 To 2014-15
Ho: All the selected Housing Finance companies of India have equal Return on
Capital Employed during study period.
Capital Employed during study period.
Square of Sum of
Freedom Square
Company 339.9981 11 30.90892 2.064566 1.915305
Year 192.651 7 27.52157 1.838307 2.13099
Error 1152.778 77 14.97115
Total 1685.428 95
accepted that Return on Capital Employed for company wise is different for selected
value Fc is smaller than tabular value Ft. Fc < Ft for company, hence Null Hypothesis
is accepted and Alternative Hypothesis is rejected that Return on capital employed on
year wise is showing equal norms for selected Housing finance companies of India.
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(c) Return on Assets
The return on assets ratio, often called the return on total assets, is a profitability ratio that
measures the net income produced by total assets during a period by comparing net
income to the average total assets. In other words, the return on assets ratio or ROA
measures how efficiently a company can manage its assets to produce profits during a
period.
Since company assets' sole purpose is to generate revenues and produce profits, this ratio
helps both management and investors see how well the company can convert its
investments in assets into profits. You can look at ROA as a return on investment for the
company since capital assets are often the biggest investment for most companies. In this
case, the company invests money into capital assets and the return is measured in profits.
The return on assets ratio measures how effectively a company can earn a return on its
investment in assets. In other words, ROA shows how efficiently a company can convert
the money used to purchase assets into net income or profits.
Since all assets are either funded by equity or debt, some investors try to disregard the
costs of acquiring the assets in the return calculation by adding back interest expense in
the formula.
It only makes sense that a higher ratio is more favourable to investors because it shows
that the company is more effectively managing its assets to produce greater amounts of
net income. A positive ROA ratio usually indicates an upward profit trend as well. ROA
is most useful for comparing companies in the same industry as different industries use
assets differently.
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Table 5.22
RETURN ON ASSETS IN PERCENTAGE
Company 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 Average
Can Fin 1.41 1.61 1.78 1.85 1.61 1.33 1.28 1.03 1.49
Dewan 1.83 1.32 1.55 1.58 1.42 1.26 1.20 1.13 1.41
GIC 2.24 1.95 2.19 3.05 1.37 1.78 1.76 1.53 1.98
Gruh Fin 2.09 1.98 2.58 2.69 2.77 2.60 2.44 2.21 2.42
HDFC 2.88 2.25 2.43 2.53 2.46 2.48 2.40 2.35 2.47
India HL 3.34 2.83 8.17 1.22 0.25 2.69 3.77 2.51 3.10
India bulls 1.16 15.76 6.20 2.27 1.28 3.18 3.50 3.58 4.62
LICHF 1.65 1.80 1.64 1.85 1.41 1.27 1.37 1.23 1.53
REPCO 2.07 2.43 2.96 2.77 2.15 2.10 2.32 2.02 2.35
SAHARA 0.85 1.29 1.57 1.41 1.38 1.09 1.50 1.34 1.30
SHRISTI 5.32 0.32 0.77 1.18 0.26 0.76 0.75 0.75 1.26
IS
VAXHF 10.64 2.21 1.98 10.39 1.02 0.09 0.10 0.13 3.32
Average 2.96 2.98 2.82 2.73 1.45 1.72 1.87 1.65
From the above table it is evident that Highest Return on Assets in percentage is
showing for India Bulls with Average 4.62% which is followed by VAXHF with an
Average of 3.32 % while lowest is shown by Shristi Infrastructure with an average of
1.26% during the study period. Highest yearly average is shown by the year 2007-08
with an Average of 2.96 % that is due to VAXHF is having highest average on capital
employed in that year.
Chart 5.5
Average of Return on Asset of Selected Housing Finance
companies from 2007-08 to 2014-15
5.00
4.00
3.00
2.00
1.00
0.00
219
CHAPTER 5
From the above Graph it is evident that Highest Return on Assets in percentage is
showing for India Bulls with Average 4.62% which is followed by VAXHF with an
Average of 3.32 % while lowest is shown by Shristi Infrastructure with an average of
1.26% during the study period.
Table 5.23
“F”-Test TWO Way ANOVA for Ratio of Return on Assets of Selected Housing
Ho: All the selected Housing Finance companies of India have equal Return on
Assets during study period.
Assets during study period.
Square of Sum of
Freedom Square
Company 90.33294 11 8.212085 1.919164 1.915305
Year 36.17113 7 5.167305 1.207599 2.13099
Error 329.4823 77 4.27899
Total 455.9863 95
accepted that Return on Assets for company wise is different for selected Housing
year wise tabular value of Ft is 2.13099 which show that calculated value Fc is
smaller than tabular value Ft. Fc < Ft for company, hence Null Hypothesis is accepted
and Alternative Hypothesis is rejected that Return on Assets on year wise is showing
equal norms for selected Housing finance companies of India.
220
CHAPTER 5
[C] PER SHARE RETURN BASE ANALYSIS
There are various parameters to measure the return of investor. Investors are generally
not mean to invest in the share of a company for long term purposes hence they focus
on the per share return with various angles, out of which two main parameters to
measure the per share return are (i) Basic EPS and (ii) Revenue from operation per
share.
(a) Basic EPS
Earnings per share, also called net income per share, is a market prospect ratio that
measures the amount of net income earned per share of stock outstanding. In other
words, this is the amount of money each share of stock would receive if all of the
profits were distributed to the outstanding shares at the end of the year.
Earnings per share are also a calculation that shows how profitable a company is on a
shareholder basis. So a larger company's profits per share can be compared to smaller
company's profits per share. Obviously, this calculation is heavily influenced on how
many shares are outstanding. Thus, a larger company will have to split its earning
amongst many more shares of stock compared to a smaller company.
Earnings per share are the same as any profitability or market prospect ratio. Higher
earnings per share are always better than a lower ratio because this means the
company is more profitable and the company has more profits to distribute to its
shareholders.
Although many investors don't pay much attention to the EPS, higher earnings per
share ratio often make the stock price of a company rise. Since so many things can
manipulate this ratio, investors tend to look at it but don't let it influence their
decisions drastically.
221
CHAPTER 5
Table 5.24
BASIC EPS
Company 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 Average
Can Fin 13.65 15.36 19.13 20.51 21.36 26.42 36.96 41.45 24.36
Dewan 13.64 14.26 17.72 26.43 28.97 38.47 41.23 47.82 28.57
GIC 10.47 10.59 12.46 21.13 10.96 15.79 18.12 19.12 14.83
Gruh Fin 12.22 14.51 19.86 26.19 34.13 8.21 9.86 5.57 16.32
HDFC 85.77 80.72 98.96 24.18 27.97 31.84 34.89 38.13 52.81
India HL 0.26 0.21 0.93 0.12 0.03 0.38 0.55 0.51 0.37
India bulls 0.18 4.00 4.15 1.66 1.36 39.34 46.30 57.18 19.27
LICHF 45.55 62.55 69.71 20.53 19.20 20.28 26.10 27.47 36.42
REPCO 3.91 6.51 9.47 12.52 13.23 17.07 17.71 19.78 12.53
SAHARA 1.63 2.51 3.18 3.23 3.17 2.86 3.77 3.13 2.94
SHRISTI 2.86 0.28 0.75 1.68 0.37 1.09 1.09 1.01 1.14
IS
VAXHF 1.41 0.23 0.27 1.34 0.41 0.03 0.03 0.05 0.47
Average 15.96 17.64 21.38 13.29 13.43 16.82 19.72 21.77
From the above table it is evident that Highest Basic EPS is showing for HDFC with
an Average 52.81 Rs. which is followed by LIC Housing Finance with an Average of
36.42 Rs. while lowest is shown by VAXHF with an average of 0.47 Rs. during the
study period. Highest yearly average is shown by the year 2014-15 with an Average
of 21.77 Rs which is followed by 2013-14 with an Average Rs.19.72 while lowest
EPS is shown by the year 2010-11 with an average Rs.13.29.
Chart 5.6
Average of Basic EPS of Selected Housing Finance
Companies from 2007-08 To 2014-15
60.00
50.00
40.00
30.00
20.00
10.00
0.00
222
CHAPTER 5
From the above Graph it is evident that Highest Basic EPS is showing for HDFC with
an Average 52.81 Rs. which is followed by LIC Housing Finance with an Average of
36.42 Rs. while lowest is shown by VAXHF with an average of 0.47 Rs. during the
study period.
Table 5.25
“F”-Test TWO Way ANOVA for Basic EPS of Selected Housing Finance
Companies of India From 2007-08 To 2014-15
Ho: All the selected Housing Finance companies of India have equal Basic EPS
during study period.
H1: All the selected Housing Finance companies of India have unequal Basic EPS
Square of Sum of
Freedom Square
Company 22989.24 11 2089.931 10.50969 1.915305
Year 903.8954 7 129.1279 0.649349 2.13099
Error 15312.04 77 198.8576
Total 39205.17 95
accepted that Basic EPS for company wise is different for selected Housing finance
companies of India while Year wise calculated value of Fc is 0.649649 and year wise
tabular value of Ft is 2.13099 which show that calculated value Fc is smaller than
tabular value Ft. Fc < Ft for company, hence Null Hypothesis is accepted and
Alternative Hypothesis is rejected that Basic EPS on year wise is showing equal
223
CHAPTER 5
(b) Funds from Operations per Share
Funds from operations (FFO) is an alternative metric to net income. Both are used to
measure the returns being generated by business operations based on income
statement items. While net income measures accounting profits, FFO is a cash flow
measure. FFO is calculated by adding non-cash charges, such as depreciation or
amortization, to net income. Non-operating income and expenses such as interest,
gains on the sale of property and minority interest are also often eliminated to get
FFO from net income.
FFO is employed in evaluating businesses for which net income may not be an
accurate representation of a company's operation in a normal period. Real estate
investment trusts (REITs) are frequently evaluated using FFO rather than earnings per
share (EPS) because depreciation expenses associated with real investment property
are not typically considered a cost of operating such a business. Analysts and
managers of REITs commonly employ adjusted FFO. The adjusted version generally
subtracts depreciation related to classes of capitalized property that are considered
elements of REIT operation rather than investment property. Furniture or carpeting
are examples of property that motivate the use of adjusted FFO.
Table 5.26
Fund from Operation Per Share in Rs.
Company 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 Average
Can Fin 108.10 108.80 104.31 112.86 139.68 191.57 282.00 306.62 169.24
Dewan 86.16 114.09 119.75 138.79 211.21 321.53 386.82 410.42 223.60
GIC 50.41 57.70 54.74 62.42 80.95 102.49 115.73 135.66 82.51
Gruh Fin 58.21 84.84 88.75 102.70 145.57 36.44 46.94 29.18 74.08
HDFC 287.86 386.53 394.92 87.62 117.36 136.53 154.71 114.01 209.94
India HL 0.96 0.78 0.59 0.51 1.11 1.43 1.85 2.16 1.17
India bulls 0.25 8.42 12.94 13.55 13.07 149.05 156.39 175.71 66.17
LICHF 245.82 338.86 363.83 97.26 121.09 150.02 181.82 211.28 213.75
REPCO 17.84 29.21 35.21 48.56 68.65 65.27 85.93 111.00 57.71
SAHARA 16.58 25.02 25.01 28.79 28.36 28.12 28.49 24.82 25.65
SHRISTI 38.57 39.50 42.29 49.03 55.97 51.61 55.93 47.30 47.53
IS
VAXHF 1.41 0.46 0.86 14.89 6.65 12.26 6.16 7.62 6.29
Average 76.01 99.52 103.60 63.08 82.47 103.86 125.23 131.32
224
CHAPTER 5
From the above table it is evident that Highest Fund from Operation per Share is
showing for Dewan with an Average 223.60 Rs. which is followed by LIC Housing
Finance with an Average of 209.94 Rs. while lowest is shown by India Home Loan
with an average of 1.17 Rs. during the study period. Highest yearly average is shown
by the year 2014-15 with an Average of 131.32 Rs which is followed by 2013-14 with
an Average Rs.125.23 while lowest Fund from operation per share is shown by the
year 2010-11 with an average Rs.63.08.
Chart 5.7
Average of Fund from operation per share in Rs. of selected
Housing Companies from 2007-08 To 2014-15
250.00
Average & Variances
200.00
150.00
100.00
50.00
0.00
Name of Companies
From the above Graph it is evident that Highest Fund from Operation per Share is
showing for Dewan with an Average 223.60 Rs. which is followed by LIC Housing
Finance with an Average of 209.94 Rs. while lowest is shown by India Home Loan
with an average of 1.17 Rs. during the study period.
225
CHAPTER 5
Table 5.27
“F”-Test TWO Way ANOVA for Fund from Operation Per Share of Selected
Ho: All the selected Housing Finance companies of India have equal Fund from
Operation during study period.
H1: All the selected Housing Finance companies of India have unequal Fund from
operation during study period.
Square of Sum of
Freedom Square
Company 606363.7 11 55123.97 11.50191 1.915305
Year 46356.37 7 6622.339 1.381787 2.13099
Error 369029.5 77 4792.591
Total 1021750 95
accepted that Revenue from operation per share for company wise is different for
selected Housing finance companies of India while Year wise calculated value of Fc is
value Fc is smaller than tabular value Ft. Fc < Ft for company, hence Null Hypothesis
is accepted and Alternative Hypothesis is rejected that Revenue from operation per
share on year wise is showing equal norms for selected Housing finance companies
of India.
226
CHAPTER 5
[D] LIQUIDITY BASE ANALYSIS
Liquidity ratios are the ratios that measure the ability of a company to meet its short
term debt obligations. These ratios measure the ability of a company to pay off its
short-term liabilities when they fall due.
The liquidity ratios are a result of dividing cash and other liquid assets by the short
term borrowings and current liabilities. They show the number of times the short term
debt obligations are covered by the cash and liquid assets. If the value is greater than
1, it means the short term obligations are fully covered.
Generally, the higher the liquidity ratios are, the higher the margin of safety that the
company possess to meet its current liabilities. Liquidity ratios greater than 1 indicate
that the company is in good financial health and it is less likely fall into financial
difficulties.
Most common examples of liquidity ratios include current ratio, acid test ratio (also
known as quick ratio), cash ratio and working capital ratio. Different assets are
considered to be relevant by different analysts. Some analysts consider only the cash
and cash equivalents as relevant assets because they are most likely to be used to meet
short term liabilities in an emergency. Some analysts consider the debtors and trade
receivables as relevant assets in addition to cash and cash equivalents. The value of
inventory is also considered relevant asset for calculations of liquidity ratios by some
analysts.
The concept of cash cycle is also important for better understanding of liquidity ratios.
The cash continuously cycles through the operations of a company. A company’s cash
is usually tied up in the finished goods, the raw materials, and trade debtors. It is not
until the inventory is sold, sales invoices raised, and the debtors’ make payments that
the company receives cash. The cash tied up in the cash cycle is known as working
capital, and liquidity ratios try to measure the balance between current assets and
current liabilities.
227
CHAPTER 5
A company must possess the ability to release cash from cash cycle to meet its
financial obligations when the creditors seek payment. In other words, a company
should possess the ability to translate its short term assets into cash. The liquidity
ratios attempt to measure this ability of a company.
(a) Current Ratio
The current ratio indicates a company's ability to meet short-term debt obligations.
The current ratio measures whether or not a firm has enough resources to pay its debts
over the next 12 months. Potential creditors use this ratio in determining whether or
not to make short-term loans. The current ratio can also give a sense of the efficiency
of a company's operating cycle or its ability to turn its product into cash. The current
ratio is also known as the working capital ratio.
The higher the ratio, the more liquid the company is. Commonly acceptable current
ratio is 2; it's a comfortable financial position for most enterprises. Acceptable current
ratios vary from industry to industry. For most industrial companies, 1.5 may be an
acceptable current ratio.
Low values for the current ratio (values less than 1) indicate that a firm may have
difficulty meeting current obligations. However, an investor should also take note of a
company's operating cash flow in order to get a better sense of its liquidity. A low
current ratio can often be supported by a strong operating cash flow.
If the current ratio is too high (much more than 2), then the company may not be
using its current assets or its short-term financing facilities efficiently. This may also
indicate problems in working capital management.
All other things being equal, creditors consider a high current ratio to be better than a
low current ratio, because a high current ratio means that the company is more likely
to meet its liabilities which are due over the next 12 months.
228
CHAPTER 5
Table 5.28
Current Ratio in Proportion
Company 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 Average
Can Fin 16.73 29.88 13.77 0.13 0.11 0.06 0.05 0.05 7.60
Dewan 60.14 52.27 65.69 1.45 0.72 0.44 0.47 0.32 22.69
GIC 1.13 1.13 1.12 0.56 0.66 0.33 0.33 0.24 0.69
Gruh Fin 5.55 36.60 32.72 0.37 0.46 0.37 0.37 0.40 9.61
HDFC 14.22 7.57 7.96 0.43 0.37 0.36 0.30 0.27 3.94
India HL 13.61 162.76 77.94 89.52 1.08 58.30 53.29 30.36 60.86
India bulls 206.19 5.52 5.36 14.94 9.62 0.75 0.69 0.78 30.48
LICHF 16.90 12.05 13.30 0.52 0.51 0.39 0.47 0.46 5.58
REPCO 3.82 5.55 3.82 0.29 0.27 0.47 0.33 0.33 1.86
SAHARA 66.68 58.60 45.14 1.21 1.47 2.00 1.66 1.90 22.33
SHRISTI 0.97 1.19 1.43 1.12 1.11 1.36 1.59 1.28 1.26
IS
VAXHF 1.69 4.07 1.77 1.13 2.71 8.23 20.91 4.21 5.59
Average 33.97 31.43 22.50 9.31 1.59 6.09 6.71 3.38
From the above table it is evident that Highest Current Ratio is showing for India
Home Loan with an Average 60.86 which is followed by India Bulls with an Average
of 30.48 while lowest is shown by Shristi Infrastructure with an average of 1.26
during the study period. Highest yearly average is shown by the year 2007-08 with an
Average of 33.97 which is followed by 2008-09 with an Average 31.43 while lowest
current ratio is shown by the year 2011-12 with an average 1.59.
Chart 5.8
Average of Current Ratio of Selected Housing Finance
80.00
60.00
40.00
20.00
0.00
229
CHAPTER 5
From the above Graph it is evident that Highest Current Ratio is showing for India
Home Loan with an Average 60.86 which is followed by India Bulls with an Average
of 30.48 while lowest is shown by Shristi Infrastructure with an average of 1.26
during the study period.
Table 5.29
“F”-Test TWO Way ANOVA for Current Ratio of Selected Housing Finance
Companies of India From 2007-08 To 2014-15
Ho: All the selected Housing Finance companies of India have equal Current Ratio
H1: All the selected Housing Finance companies of India have unequal Current
Ratio during study period.
Square of Sum of
Freedom Square
Company 27206.6 11 2473.327 3.424791 1.915305
Year 14140.54 7 2020.077 2.79718 2.13099
Error 55608.12 77 722.1834
Total 96955.26 95
accepted that Current Ratio for company wise is different for selected Housing
finance companies of India while Year wise calculated value of Fc is 2.79718 and year
wise tabular value of Ft is 2.13099 which show that calculated value Fc is also greater
than tabular value Ft. Fc > Ft for company, hence Null Hypothesis is rejected and
Alternative Hypothesis is accepted that Current Ratio on year wise is showing equal
230
CHAPTER 5
(b) Dividend pay-out Ratio
The dividend pay-out ratio measures the proportion of earnings paid out to
shareholders as dividends. The ratio is used to determine the ability of an entity to pay
dividends, as well as its reliability in doing so.
A public company in a mature industry, or one whose sales are no longer growing
rapidly, usually has a high dividend pay-out ratio. Such companies tend to attract
investors who buy shares almost exclusively for the reliability of dividend payments;
growth investors do not invest in these companies.
Newer companies that are using all of their cash flow to sustain a high rate of growth
usually have a zero dividend pay-out ratio, and attract growth investors who are not
concerned with dividends, but prefer instead to earn a profit on the appreciation of
their shares in the business.
The ratio also reveals whether a company can sustain its current level of dividend
pay-outs. If the ratio is greater than 100%, then the company is dipping into its cash
reserves to pay dividends. This situation is not sustainable, and may result in the
eventual termination of all dividends or the financial decline of the business.
It is also useful to examine the inverse of the ratio, which reveals how much cash the
company is retaining for its own uses. If the retention amount is declining, this
indicates that the company does not see a sufficient return on investment to be worthy
of ploughing additional cash back into the business.
231
CHAPTER 5
Table 5.30
Dividend Pay-Out Ratio on Net profit in Percentage
Company 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 Average
Can Fin 18.31 12.99 10.45 12.18 14.04 15.13 17.58 21.61 15.29
Dewan 18.32 17.52 16.92 13.79 13.34 13.69 19.41 12.97 15.75
GIC 38.19 37.77 36.11 26.03 41.03 31.65 33.12 26.15 33.76
Gruh Fin 49.01 50.48 62.65 42.26 33.73 30.58 30.53 35.66 41.86
HDFC 29.14 37.16 36.37 37.34 39.40 39.86 40.15 39.43 37.36
India HL 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
India bulls 0.00 0.00 0.00 0.00 0.00 50.86 63.95 46.02 20.10
LICHF 21.93 20.76 21.50 17.04 19.87 18.74 17.24 18.20 19.41
REPCO 0.00 0.00 0.00 7.98 8.31 8.54 6.77 7.59 4.90
SAHARA 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
SHRISTI 6.26 10.89 11.39 9.99 20.53 46.30 45.55 58.22 26.14
IS
VAXHF 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Average 15.10 15.63 16.28 13.88 15.85 21.28 22.86 22.15
From the above table it is evident that Highest Dividend Pay-out Ratio on Net profit
in percentage is showing for Gruh Finance with an Average 41.86 which is followed
by HDFC with an Average of 37.36 while lowest is shown by India Home Loan;
SAHARA and VAXHF who have not paid any dividend during the study period.
Highest yearly average is shown by the year 2013-14 with an Average of 22.86 which
is followed by 2014-15 with an Average 22.15 while lowest Dividend Pay-out Ratio
is shown by the year 2010-11 with an average 13.88.
Chart 5.9
Average of Dividend Pay Out Ratio of selected Housing
Finance Companies from 2007-08 To 2014-15
60.00
40.00
20.00
0.00
232
CHAPTER 5
From the above Graph it is evident that Highest Dividend Pay-out Ratio on Net profit
in percentage is showing for Gruh Finance with an Average 41.86 which is followed
by HDFC with an Average of 37.36 while lowest is shown by India Home Loan;
SAHARA and VAXHF who have not paid any dividend during the study period.
Table 5.31
“F”-Test TWO Way ANOVA for Dividend Pay-out Ratio of Selected Housing
Ho: All the selected Housing Finance companies of India have equal Dividend Pay-
Out Ratio during study period.
H1: All the selected Housing Finance companies of India have unequal Dividend
Pay-out Ratio during study period.
Square of Sum of
Freedom Square
Company 19367.65 11 1760.695 15.16726 1.915305
Year 1080.42 7 154.3458 1.329586 2.13099
Error 8938.567 77 116.0853
Total 29386.63 95
accepted that Dividend Pay-out Ratio for company wise is different for selected
value Fc is also smaller than tabular value Ft. Fc < Ft for company, hence Null
Hypothesis is rejected and Alternative Hypothesis is accepted that Dividend Pay-Out
Ratio on year wise is showing equal norms for selected Housing finance companies
of India.
233
CHAPTER 5
(c) Debt Equity Ratio
The debt to equity ratio is a financial, liquidity ratio that compares a company's total
debt to total equity. The debt to equity ratio shows the percentage of company
financing that comes from creditors and investors. A higher debt to equity ratio
indicates that more creditor financing (bank loans) is used than investor financing
(shareholders).
Each industry has different debt to equity ratio benchmarks, as some industries tend to
use more debt financing than others. A debt ratio of 0.5 means that there are half as
many liabilities as there is equity. In other words, the assets of the company are
funded 2 to 1 by investors to creditors. This means that investors own 66.6 paisa of
every rupee of company assets while creditors only own 33.3 paisa on the rupees.
A debt to equity ratio of 1 would mean that investors and creditors have an equal
stake in the business assets.
A lower debt to equity ratio usually implies a more financially stable business.
Companies with a higher debt to equity ratio are considered more risky to creditors
and investors than companies with a lower ratio. Unlike equity financing, debt must
be repaid to the lender. Since debt financing also requires debt servicing or regular
interest payments, debt can be a far more expensive form of financing than equity
financing. Companies leveraging large amounts of debt might not be able to make the
payments.
Creditors view a higher debt to equity ratio as risky because it shows that the
investors haven't funded the operations as much as creditors have. In other words,
investors don't have as much skin in the game as the creditors do. This could mean
that investors don't want to fund the business operations because the company isn't
performing well. Lack of performance might also be the reason why the company is
seeking out extra debt financing.
234
CHAPTER 5
Table 5.32
Debt Equity Ratio
Company 2007-08 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 Average
Can Fin 7.71 6.69 6.79 4.95 5.70 7.84 10.38 9.00 7.38
Dewan 9.06 12.93 10.26 8.60 8.34 8.48 9.48 8.74 9.48
GIC 6.68 7.12 6.79 5.70 6.37 6.17 6.71 7.58 6.64
Gruh Fin 9.32 10.17 8.78 7.27 7.95 7.69 9.20 10.68 8.88
HDFC 5.79 6.38 6.35 4.78 5.05 4.38 4.03 4.23 5.12
India HL 0.01 0.00 0.00 0.00 0.08 0.00 0.00 0.21 0.04
India bulls 0.00 0.00 1.24 1.70 1.72 4.98 5.19 6.03 2.61
LICHF 11.11 11.38 10.26 9.10 8.42 9.06 9.49 10.64 9.93
REPCO 5.23 6.22 5.62 6.25 6.63 4.05 4.46 5.37 5.48
SAHARA 5.95 5.43 5.44 4.81 4.29 4.63 4.14 3.94 4.83
SHRISTI 1.77 3.94 0.86 0.85 0.97 1.09 0.81 0.81 1.39
IS
VAXHF 0.00 0.00 0.00 10.39 1.02 0.09 0.10 0.13 1.47
Average 5.22 5.86 5.20 5.37 4.71 4.87 5.33 5.61
From the above table it is evident that Highest Debt Equity Ratio is showing for LIC
Housing Finance with an Average 9.93 which is followed by DEWAN with an
Average of 9.48 while lowest is shown by India Home Loan with an average of 0.04
during the study period. Highest yearly average is shown by the year 2008-09 with an
Average of 5.86 which is followed by 2014-15 with an Average 5.61 while lowest
Debt Equity Ratio is shown by the year 2011-12 with an average 4.71.
Chart 5.10
Average of Debt Equity Ratio of Selected Housing Finance
12.00
10.00
8.00
6.00
4.00
2.00
0.00
235
CHAPTER 5
From the above Graph it is evident that Highest Debt Equity Ratio is showing for LIC
Housing Finance with an Average 9.93 which is followed by DEWAN with an
Average of 9.48 while lowest is shown by India Home Loan with an average of 0.04
during the study period.
Table 5.33
“F”-Test TWO Way ANOVA for Debt Equity Ratio of Selected Housing
Ho: All the selected Housing Finance companies of India have equal Debt Equity
H1: All the selected Housing Finance companies of India have unequal Debt Equity
Square of Sum of
Freedom Square
Company 985.4025 11 89.58205 33.91864 1.915305
Year 11.4162 7 1.630886 0.617506 2.13099
Error 203.3636 77 2.641086
Total 1200.182 95
accepted that Debt Equity Ratio for company wise is different for selected Housing
year wise tabular value of Ft is 2.13099 which show that calculated value Fc is also
smaller than tabular value Ft. Fc < Ft for company, hence Null Hypothesis is rejected
and Alternative Hypothesis is accepted that Debt Equity Ratio on year wise is
236
CHAPTER 5
5.4 CONCLUSION
In the present chapter Researcher has studied various parameters corresponding to the
Research Title “Performance Evaluation of Selected Housing Finance Companies of
India”. Performance Evaluation can measure with various dimensions but, researcher
has considered two dimension studies for the present study (a) Comparison of various
schemes and terms of selected Housing Finance Companies of India (b) Financial
Performance evaluation of selected Housing Finance Companies of India.
References:
1) www.nhb.org.in
2) www.shristicorp.com
3) www.saharahousingfina.com
4) www.repcohome.com
5) www.gruh.com
6) www.gichfindia.com
7) www.dhfl.com
8) www.canfinhomes.com
9) www.indiabullshomeloans.com
10) www.indiahomeloan.co.in
11) www.lichousing.com
12) www.moneycontrol.com
13) www.bseindia.co.in
237

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CHAPTER -5

Generally Housing Finance Companies provide following types of loan

Home Equity Loans: A form of finance to the customer by way of mortgage of

5.2 COMPARISONS OF HOME LOAN SCHEMES

(a) Comparison of Eligibility Criteria of AGE , INCOME and WORK

Minimum Income eligibility for salaried person is ranging between 1,20,000 to

(b) Comparison of Eligibility Criteria of LOAN Amount, LOAN tenure and

(d) Comparison of Processing Fees for Selected Housing Finance Companies of

(e) Comparison of Administrative and Commitment charges for Selected

(f) Comparison of Security of loan for Selected Housing Finance Companies

(g) Comparison of Sanctioning Period for Selected Housing Finance Companies

(h) Comparison of Disbursement period for Selected Housing Finance

(i) Comparison of Insurance required for Selected Housing Finance

(j) Comparison of Penalty for Pre-Payment for Selected Housing Finance

Following table is showing the Comparative Interest Rate of Selected Housing

(l) Comparison of Home Loan Sanction, Disbursement and percentage of

(A) 264 356 653 546 1105 2093 2907 3670

5.3 FINANCIAL DATA ANALYSIS

Performance Evaluation is closely related to the surety of the working system of a

Financial Performance of an organization is based on following basic four parameters

1) How liquid is the firm?

Figure 5.1 Performance Evaluation

FINANCIAL PERFORMANCE EVALUATION

Financial Performance is the snapshot of a position of concern and ability to

performance is done in order to measure the efficiency of operations or profitability of

Thus, financial Performance is generally directed towards evaluating the Liquidity,

Present Study is based on following parameters

B Return (a) Return on Net Worth

C Per Share (a) Basic EPS

D Liquidity (a) Current Ratio

[A] PROFITABILITY AND EFFICIENCY CRITERIA ANALYSIS

Profitability is measured with an “income statement”. This is essentially a listing of

Reasons for Computing Profitability

(a) Net Profit (Net Income) Margin

(b) Asset Turnover Ratio

[B] RETURN BASE ANALYSIS

Return base analysis is basically a part of profitability analysis. Income generated

(a) Return on Net Worth

(b) Return on Capital Employed

(c) Return on Assets

[C] PER SHARE RETURN BASE ANALYSIS

(b) Funds from Operations per Share

[D] LIQUIDITY BASE ANALYSIS

(a) Current Ratio

(b) Dividend pay-out Ratio

(c) Debt Equity Ratio

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