DHFL (Dewan Housing Finance Ltd.) reported a stellar set of numbers for the quarter ended 30th September 30, 2016 (Q2Fy17).
Highlights Q2Fy17 :
- Total income rose by 19.66% to Rs 2,167.72 crore
- Profit before tax rose by 27%
- Net profit increased by 28.96 % ·
- Assets Under Management grew 19.71% to Rs 75,223 crore
- Loan sanctions and disbursements were Rs 8,437 crore and Rs 6,609 crore for up 10% and 32% yoy.
- Gross NPA stood at 0.96% (.93% for year ended 2016)
- Net Interest Margin stood at 3.05% in Q2 FY17 as compared to 2.89% in Q2 FY16
Detailed Financial results Q2Fy17 (Figures in Rs. Crore )
| Sep-15 | Dec-15 | Mar-16 | Jun-16 | Sep-16 | yoy% | qoq % | |
| Net Sales Turnover | 1810.73 | 1884.4 | 1964.5 | 1958.28 | 2166.7 | 19.66 | 10.64 |
| Other Income | 0.91 | 0.96 | 2.08 | 1.04 | 1.07 | ||
| Total Income | 1811.64 | 1885.3 | 1966.6 | 1959.32 | 2167.7 | ||
| Total Expenses | 170.1 | 178.34 | 199.92 | 174.69 | 178.03 | ||
| EBITDA | 1641.54 | 1707 | 1766.7 | 1784.63 | 1989.7 | 21.21 | 11.49 |
| Depreciation | 6.72 | 6.83 | 5.05 | 6.36 | 6.81 | ||
| EBIT | 1634.82 | 1700.2 | 1761.6 | 1778.27 | 1982.9 | 21.29 | 11.51 |
| Interest | 1357.48 | 1419.7 | 1478.6 | 1475.37 | 1630.7 | ||
| PBT | 277.34 | 280.45 | 283.04 | 302.9 | 352.22 | 27 | 16.28 |
| Tax | 96.97 | 94.55 | 93.38 | 101.5 | 119.61 | ||
| Net Profit | 180.37 | 185.9 | 189.66 | 201.4 | 232.61 | 28.96 | 15.5 |
| NPM | 9.96% | 9.87% | 9.65% | 10.28% | 10.74% | 7.83 | 4.47 |
| Equity | 291.71 | 291.77 | 291.8 | 291.8 | 313.03 | ||
| Basic EPS | 6.18 | 6.37 | 6.5 | 6.9 | 7.97 | ||
| Face Value | 10 | 10 | 10 | 10 | 10 | ||
| Dividend (%) | 30 | 0 | 0 | 0 | 10 | ||
| Gross NPA | 0.96% | ||||||
| Net NPA | |||||||
| Price | 307.3 | ||||||
| EPS (TTM) | 25.86 | ||||||
| PE Ratio (TTM) | 11.88 |
Assessment :
- DHFL stands to benefit immensely from raising 4000 crore from its first Public NCD issue in Aug 2016 which was almost immediately followed with another 10000 cr. public NCD Issue. This is expected to lower DHFL cost of funds.
- As a result the share of bank borrowings in the total borrowings came down to 44% from 58% in Q2 FY15
- The full benefit of the cost reduction on account of this large amount of money raised, has not made an impact in this quarter, but over the next few quarters, DHFL is likely to see a good amount of traction on account of this.
- DHFL also raised Innovative Perpetual Debt of Rs.475 Cr during the quarter, aggregating to Rs.660 Cr
- Shri Kapil Wadhawan, CMD, DHFL has stated that weighted average cost of funds would be at 9 percent in FY17 versus 9.56 percent reported in FY16. This could lead to good boost in profitability.
- Usually the company does better in 2nd half than in the first half of the year. Good performance in first half gives rise to hopes for better overall performance
- The company has shown increase in lending into in smaller towns and cities in the country.
- The Company could also experience positive vibes as PNB housing finance enters the capital market.
- DHFL achieved improvement in net interest margin (NIM) to almost 3% + (3.05%) and is hopeful of either maintaining the same or even moving up by another 5-7 basis
- Promoter shareholding increased from 34.89% to 39.31% which lends confidence.
- The results were announced in the middle of trading session today; DHFL scrip closed the day at 307.3 up 2.06%
Standard disclaimer: I am not a SEBI registered analyst. I may have vested interest in every stock I discuss. Please do your own due diligence as stock market investments have high degree of inherent risk.