DISCLAIMER

Please note that these are my views and only my views. No one can predict how markets will perform. Its quite possible that markets perform accordingly to my thoughts. (Wow what will be the fun, if they perform according to my thoughts !!! ) These are just predictions and so far my predictions have helped me in stock market. Thats the reason I thought I will share my thoughts for stocks. Please do your own study before investing.

Tuesday, January 25, 2011

GIC Housing Finance - Safe Bet

GIC Housing Finance (GICHF) is a company floated by GIC- re insurer of the country. Its a small outfit compared to HDFC, LIC Housing etc. It fits in the category of Gruh Finance, Canfin Homes, Dewan Housing etc. GICHF's last year's revenue was around Rs 311 Cr. In first Half year of 2010 it has posted Rs 163. Cr in Sales and Rs 40 Cr in Net profit. It has started expanding. Now it has total 27 branches and its primary focus is tier II cities like Baroda, Nasik, Nagpur. This is where the next growth in housing will take place. It has been backed by one of the biggest insurance companies in India.

Following is the comparison of selected Housing companies.


In Cr.
GIC Housing
HDFC
LIC HF
Gruh Finance
Sales
311
11338
3456
308
PAT
67.09
2826
662
68.96
EPS
12.46
99.08
70.42
20.27
PE
8.4
32.2
13.6
16.7
Dividend Yield
4%
1.1%
1.6%
1.6%
YOY Growth for Sep’10 Half Year
16%
22%
51%
57%


GICHF is available at lowest PE and highest Dividend yield today compared to other HFCs. It has posted modest growth as well on half yearly basis. LICHF has posted very high growth but has been under clouds because of the recent issue.

Today's closing price was Rs. 111, it can further go down slightly because of interest rate concern and housing slow down. It will be the best opportunity to pick this stock. Looking at the current trend it can pay higher dividend this year.

This is my view on this stock. You should review the performance of any stock before buying
at 8:16:00 PM
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4 comments:

Unknown said...

Sure, looks like good bet. However, any inputs on their growth plans?

January 26, 2011 at 10:54 AM
Deo said...

About growth, Yes they are opening new branches, this year they are going as fast as HDFC. But they are not growing better than industry. The growth will be moderate but moderate downside as well. In Jan-10 it was 80 and it had gone upto 160 in Nov-10, but have retracted because reasons I mentioned. Whenever market conditions improve it should give 100% growth and dividend is additional.

BTW thanks for comments

January 26, 2011 at 1:47 PM
Deo said...

GIC's third quarter results are better than expected and the price is subdued because of market conditions. Good opportunity to buy.

Net profit of GIC Housing Finance rose 270.00% to Rs 57.35 crore in the quarter ended December 2010 as against Rs 15.50 crore during the previous quarter ended December 2009. Sales rose 12.60% to Rs 83.03 crore in the quarter ended December 2010 as against Rs 73.74 crore during the previous quarter ended December 2009.

February 9, 2011 at 9:29 AM
Deo said...

post my recommendation stock fell down to sub-100 and came back to same levels. In the mean time board of directors have recommended Rs 5.5 as dividend !! Significant yield compared to other stocks. They have almost doubled the dividend in 4 years. These are not even high growth years of the company

June 9, 2011 at 7:17 PM

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