GRUH Finance Builds On Growth In Q3FY13

GRUH Finance announced its Dec 2012 quarter results on Jan 15, 2013. The housing finance company, which also a subsidiary of housing finance giant HDFC, posted a good performance for the quarter.  While its total income stood at Rs 166.42 crore, the bottomline stood at Rs 28.89 crore as against Rs 131.94 crore and Rs 23.23 crore for the quarter ended Dec 2011.

The company saw topline growth of 26.13% and bottomline growth of 23.99% on a YoY basis. On the sequential front too, the performance has been favourable, with the topline growing by 6% and the bottomline by 6.17%. As for 9MFY13, the topline stood at Rs 471.17 crore and the bottomline at Rs 82.82 crore as compared to Rs 368.35 crore and Rs 64.7 crore in 9MFY12. This clearly indicates a consistent growth of more than 27% on the sales as well as the profits front.

The best part about the results has been the increased disbursements seen by the company, wherein it disbursed Rs 1490.71 crore for the said quarter as against Rs 1001.19 crore in Dec 2011. In this respect, it may be pointed out that the realty market is coming into the limelight again and that too in the Tier II and Tier III cities, where GRUH has a major presence.

Apart from that, the asset quality, which was already better at the gross levels, improved further. For the quarter, the company’s Gross NPAs were at Rs 26.74 crore, which is just 0.53% of its loan assets. It has managed to keep the net NPAs at nil over a long time, and the Dec 2012 quarter has been no different on this count.

On the valuations front, the CMP of Rs 236 discounts the scrip’s annualised FY13E earnings by 37.50x. The Price-to-Book value stands at 10.88x. However, the company has always enjoyed a premium on account of its strong management bandwidth consistent financial performance. We have already recommended GRUH finance to our investors and recommend a ‘hold’ on the counter.