Dewan Housing - Attractive valuations; Upgrade to BUY - Emkay

DEWH management remains upbeat on growth potential in the mortgage space aided by its diversified product offerings, increasing ticket size and rising non-individual loans.

- 12% of non-individual loans are in nature of LAP/LRD with adequate collateral and lower loan/value ratio. We are factoring 28% CAGR in loans and 2.6% NIM over FY13-14.

- Asset quality impeccable with GNPA at 0.9%. Raised credit cost assumptions to 25bps over FY13-14E vs 14bps in FY12. Higher share of non-retail loan will be key thing to watch out.

- Lowered our FY13/FY14E EPS by 4%/7%. Valu at 0.9x FY14 standalone ABV seem unjustified given growth visibility and stable asset quality. Upgrade to BUY post recent correction.

Source : Equity Bulls

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