Buy Dewan Housing Finance – Target price Rs. 374

Buy Dewan Housing Finance – Target price Rs. 374

Dewan Housing Finance is Rakesh Jhunjhunwala’s all-time favourite stock. He bought the stock when it was languishing at throwaway prices and has pocketed hefty multibagger gains since then.
Edelweiss has recommended a buy of DHFL on sound logic:

“DHFL is bound to be key beneficiary of government’s initiative to promote affordable housing, given its presence in tier II/III cities and lower ticket size. However, in view of rising proportion of developer loans, we are building in higher NPLs going forward. The company has the potential to deliver 20% earnings CAGR over FY16-19E with RoE of 16%. Juxtaposing this with inexpensive valuation (1.3x FY19E P/ABV) renders favourable risk-reward. We maintain ‘BUY/SO’ with a target price of INR 374.”

Disclaimer

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