Monday, July 25, 2016

GIC Housing Finance Near 52-Week High, Eyeing Results on 27th July

The stock of GIC Housing Finance had a strong close today, up by 1.32% in NSE, and just 2.85% away from making a new 52-Week High.

The focus of GIC Housing Finance has always been on loans for affordable homes, long before affordable home loans became the buzz in the industry.

When housing finance stocks were on fire during the last couple of years, GIC Housing Finance stock participated only modestly.

But in the beginning of this calendar year, when most housing finance stocks turned weary, affordable home loan provider GIC Housing’s stock started performing impressively.

On a longer duration, this joint sector home finance firm has been an outperformer with its stock price increasing 9 times within the last 7 years.

Powering GIC’s market cap expansion was a high dividend yield that stood at nearly 11% during the start of this period, and is even now a decent 1.60%, much above what most peer HFCs are offering now.

The company fares high in Respect for Equity, Sales Growth, Dividend Yield, and Asset Quality.

The positive re-rating in the stock which started early in this year has taken the stock to a P/BV valuation of 2.38 times, which still leaves room for significant price appreciation.

The re-rating has been strengthened in recent months by good performance in FY’16 that saw earnings expand by nearly 21%, aided by a strong Q4 where profit was up by nearly 35%.

A core strength of GIC Housing’s operation is its longstanding experience in serving suburban housing markets in Western India, near to major metro cities like Mumbai.

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