Gruh Finance net profit grew 20 per cent: asset quality under pressure
Chirag Gothi / 15 Jan 2016
Shares of Gruh Finance, home finance company, tanked over four per cent after the company reported the December quarter. The company has reported 20 per cent growth in net profit but the asset quality came under pressure during this quarter.
Shares of Gruh Finance, home finance company, tanked over four per cent after the company reported the December quarter.
The company has reported 20 per cent growth in net profit but the asset quality came under pressure during this quarter.
The company’s net profit rose by 20 per cent to Rs 53.74 crore due to 19.34 per cent rise in net total income from operations to Rs 323.55 crore in third quarter of the current year compared with the corresponding quarter previously.
Gruh Finance said loan assets increased from Rs 8393 crore as on December 31, 2014 to Rs 10,519 crore as on December 31, 2015 registering growth of 25 per cent.
Gross NPA ratio surged to 0.62 per cent at end of December 2015 from 0.58 per cent a quarter ago; and 0.57 per cent a year ago. Meanwhile, Net NPA ratio was reported at 0.14 percent, towards the end of December 2015 from 0.20 per cent a quarter ago ; and 0.07 per cent a year ago.
On absolute basis, the company's gross Non-Performing Assets (NPAs) stood at Rs 52 crore as on December 30 2015, compared with Rs 57.5 crore the corresponding period of the previous year.
For nine months ended December 31, 2015, the company’s net profit grew by 20 per cent to Rs 155.76 crore as against 129.74 and net income stood at Rs 930 crore registering growth of 20.7 per cent Y-o-Y.
Recently, the Securities and Exchange Board of India (SEBI) lowered mutual fund's additional investment limit in the debt papers of the housing finance companies to 5 per cent from earlier 10 per cent. Therefore, going forward, Gruh Finance may get affected due to its dependence on bond markets to raise funds, and their fund raising capabilities will come under the weather.
However, ‘Housing for All by 2022’, which creates more demand of home credit, is a huge opportunity for the housing industry. Therefore under such bearish market conditions, it is always a good opportunity to accumulate in such a counter.
Today it has closed at Rs 241.40, lower by 3.90 per cent on BSE.
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