GIC Housing Finance Ltd reported financial results for the quarter ended June 30, 2015. Net sales grew 21.31% to Rs. 2045.80 million compared to the same quarter last year. Net profit grew 11.40% to Rs. 282.50 million. EPS was Rs. 5.25, up from Rs. 4.71 the previous year. For the full 2015 fiscal year, net sales grew 17% to Rs. 7327.40 million. The company expects continued growth over the next few years and the analyst recommends buying the stock with a target price of Rs. 260.

1. CMP 225.90
Target Price 260.00
ISIN: INE289B01019
JULY 22nd
, 2015
GIC HOUSING FINANCE LTD.
Result Update (PARENT BASIS): Q1 FY16
BUYBUYBUYBUY
Index Details
Stock Data
Sector Housing Finance
BSE Code 511676
Face Value 10.00
52wk. High / Low (Rs.) 287.25/149.00
Volume (2wk. Avg. Q.) 80000
Market Cap (Rs. in mn.) 12164.72
Annual Estimated Results (A*: Actual / E*: Estimated)
YEARS FY15A FY16E FY17E
Net Sales 7327.40 8375.22 9338.37
EBITDA 6661.40 7579.57 8423.21
Net Profit 1029.60 1145.49 1264.69
EPS 19.12 21.27 23.49
P/E 11.81 10.62 9.62
Shareholding Pattern (%)
1 Year Comparative Graph
GIC HOUSING FINANCE LIMITED S&P BSE SENSEX
SYNOPSIS
GIC Housing Finance Limited (GICHFL) is
exclusively engaged in the Housing Finance
business and revenues are mainly derived from this
activity.
The company’s Net Sales jumps to Rs. 2045.80 mn
in the 1st quarter of the current year 2015-16 from
Rs. 1686.40 mn in the corresponding quarter of
previous year, registered a growth of 21.31% y-o-y.
Net profit for the June quarter rose by 11.40% to Rs.
282.50 mn from Rs. 253.60 mn, when compared
with the prior year period.
For the quarter ended 31st March 2015, operating
profit was at Rs. 1872.80 mn against Rs. 1556.60
mn for the quarter ended 31st March, 2014.
In Q1 FY16, PBT was at Rs. 436.00 mn an increased
by 13.60% as against Rs.383.80 mn in Q1 FY15.
EPS of the company was Rs. 5.25 for the June
quarter as against an EPS of Rs. 4.71 in the
corresponding quarter of the previous year.
For the end of FY15, Net sales grew by 17% at Rs.
7327.40 mn compared to Rs. 6249.20 mn for the
end of FY14.
GIC housing finance opened 55th office at Garia,
Kolkata on 10th March, 2015 and 56th office at
Hadapsar, Pune on 12th March, 2015.
Net Sales and PAT of the company are expected to
grow at a CAGR of 14% and 10% over 2014 to
2017E respectively.
PEER GROUPS CMP MARKET CAP EPS P/E (X) P/BV(X) DIVIDEND
Company Name (Rs.) Rs. in mn. (Rs.) Ratio Ratio (%)
GIC Housing Finance Ltd. 225.90 12164.72 19.12 11.81 1.84 50.00
Gruh Finance Ltd 236.00 85783.20 5.84 40.41 12.06 100.00
LIC Housing Finance Ltd 486.50 245518.50 28.65 16.98 2.75 250.00
Dewan Housing Finance Ltd 472.95 68953.70 42.61 11.10 1.49 60.00

2. QUARTERLY HIGHLIGHTS (PARENT BASIS)
Results updates- Q1 FY16,
GIC Housing Finance Ltd formed with the objective of
entering in field of direct lending to individuals & other
corporate to accelerate the housing activities in India,
reported its financial results for the quarter ended 30th
June, 2015.
The company’s Net Sales jumps to Rs. 2045.80 mn in the 1st quarter of the current year 2015-16 from Rs.
1686.40 mn in the corresponding quarter of previous year, registered a growth of 21.31% y-o-y. Net profit for
the June quarter rose by 11.40% to Rs. 282.50 mn from Rs. 253.60 mn, when compared with the prior year
period. For the quarter ended 31st March 2015, operating profit was at Rs. 1872.80 mn against Rs. 1556.60 mn
for the quarter ended 31st March, 2014. The company has reported an EPS of Rs. 5.25 for the June quarter as
against an EPS of Rs. 4.71 in the corresponding quarter of the previous year.
Break up of Expenditure
Break up of Expenditure
Rs. In millions
Q1 FY16 Q1 FY15 CHNG %
Employee Benefit Expenses 52.00 40.70 28%
Depreciation & Amortization Exp 1.80 8.10 -78%
Other Expenses 121.00 89.10 36%
Rs. In million Jun-15 Jun-14 % Change
Net Sales 2045.80 1686.40 21.31
PAT 282.50 253.60 11.40
EPS 5.25 4.71 11.40
EBITDA 1872.80 1556.60 20.31

3. COMPANY PROFILE
GIC Housing Finance Limited was incorporated as ‘GIC Grih Vitta Limited’ on 12th December 1989. The name
was changed to its present name vide a fresh Certificate of Incorporation issued on 16th November 1993. The
Company was formed with the objective of entering in the field of direct lending to individuals and other
corporates to accelerate the housing activities in India. The primary business of GICHFL is granting housing loans
to individuals and to persons/entities engaged in construction of houses/flats for residential purposes. The
Company carried a vision for the future of Housing in India. And it is always believed at GICHFL that its success
and growth depends on its principles which are:
• To be a prominent Corporate Citizen in promoting housing activities through customer friendly finance
schemes with in a service oriented atmosphere.
• To consolidate and grow in a competitive environment reflecting the ethical standard of a good corporate
citizen.
• To create Wealth and Reward Share holders
The Company was promoted by General Insurance Corporation of India and its erstwhile subsidiaries namely,
National Insurance Company Limited, The New India Assurance Company Limited, The Oriental Insurance
Company Limited and United India Insurance Company Limited together with UTI, ICICI, IFCI, HDFC and SBI, all
of them contributing to the initial share capital.
GICHFL has presence in 53 branches across the country for business. It has got a strong marketing team, which is
further assisted by Sales Associates(SAs). It has tie-ups with builders to provide finance to individual borrowers.
It also has tie-ups with corporates for various housing finance needs.

4. FINANCIAL HIGHLIGHT (PARENT BASIS) (A*- Actual, E* -Estimations & Rs. In Millions)
Balance Sheet as at March 31, 2014 -2017E
GIC HOUSING FINANCE LTD FY14A FY15A FY16E FY17E
I. EQUITY AND LIABILITIES:
A) Shareholders’ Funds:
a) Share Capital 538.80 538.80 538.80 538.80
b) Reserves and Surplus 5566.00 6064.90 6732.37 7405.61
Sub-Total-Net worth 6104.80 6603.70 7271.17 7944.41
B) Non-Current Liabilities:
a) Long-term borrowings 36300.70 43590.50 49911.12 55900.46
b) Long Term Provisions 1889.10 2031.90 2174.13 2304.58
Sub-Total-Long term Liabilities 38189.80 45622.40 52085.26 58205.04
C) Current Liabilities:
a) Short-term borrowings 4680.20 6447.50 7737.00 8897.55
b) Trade Payables 51.40 46.60 48.93 52.36
c) Other Current Liabilities 5770.00 8136.80 9926.90 11465.56
d) Short Term Provisions 385.00 335.10 294.89 310.81
Sub-Total-Current Liabilities 10886.60 14966.00 18007.72 20726.28
TOTAL EQUITY AND LIABILITIES (A + B + C) 55181.20 67192.10 77364.15 86875.73
II. ASSETS:
D) Non-Current Assets:
Fixed Assets
• Tangible Assets 42.60 26.20 19.39 20.36
• Intangible Assets 9.50 0.00 0.00 0.00
a) Total Fixed Assets 52.10 26.20 19.39 20.36
b) Non Current Investments 99.30 98.30 100.86 104.89
c) Deferred Tax Assets 604.00 376.00 330.88 350.73
d) Long Term Loans and Advances 100.00 14.40 10.94 11.27
e) Other non-current assets 149.50 157.70 164.01 172.21
Sub-Total-Non current assets 1004.90 672.60 626.08 659.46
E) Housing Loans:
a) Non Current 50580.40 62975.40 72762.69 81725.70
b) Current 2545.80 3004.00 3484.64 3972.49
Sub-Total Housing Loans 53126.20 65979.40 76247.33 85698.19
F) Current Assets:
a) Trade Receivables 96.70 94.10 98.24 104.13
b) Cash and Bank Balances 899.00 415.70 349.19 366.65
c) Short Term Loans and Advances 47.70 30.30 32.72 35.01
d) Other Current Assets 6.70 0.00 10.59 12.28
Sub-Total-Current Assets 1050.10 540.10 490.74 518.08
TOTAL ASSETS (D + E + F) 55181.20 67192.10 77364.15 86875.73

5. Annual Profit & Loss Statement for the period of 2014 to 2017E
Value(Rs. mn) FY14A FY15A FY16E FY17E
Description 12m 12m 12m 12m
Net Sales 6249.20 7327.40 8375.22 9338.37
Other Income 0.00 0.00 0.00 0.00
Total Income 6249.20 7327.40 8375.22 9338.37
Expenditure -703.60 -666.00 -795.65 -915.16
Operating Profit 5545.60 6661.40 7579.57 8423.21
Interest -4192.50 -5089.30 -5883.23 -6553.92
Gross profit 1353.10 1572.10 1696.34 1869.29
Depreciation -20.50 -35.10 -38.61 -41.70
Profit Before Tax 1332.60 1537.00 1657.73 1827.59
Tax -357.10 -408.60 -512.24 -562.90
Profit After Tax 975.50 1128.40 1145.49 1264.69
Extraordinary Items 0.00 -98.80 0.00 0.00
Net Profit 975.50 1029.60 1145.49 1264.69
Equity capital 538.50 538.50 538.50 538.50
Reserves 5566.30 6065.20 6732.37 7405.61
Face value 10.00 10.00 10.00 10.00
EPS 18.12 19.12 21.27 23.49
Quarterly Profit & Loss Statement for the period of 31st Dec, 2014 to 30th Sep, 2015E
Value(Rs. mn) 31-Dec-14 31-Mar-15 30-Jun-15 30-Sep-15E
Description 3m 3m 3m 3m
Net sales 1864.80 1989.30 2045.80 2127.63
Other income 0.00 0.00 0.00 0.00
Total Income 1864.80 1989.30 2045.80 2127.63
Expenditure -148.20 -241.00 -173.00 -195.74
Operating profit 1716.60 1748.30 1872.80 1931.89
Interest -1327.70 -1356.70 -1435.00 -1492.40
Gross profit 388.90 391.60 437.80 439.49
Depreciation -8.50 -10.30 -1.80 -1.95
Profit Before Tax 380.40 381.30 436.00 437.54
Tax -105.80 -88.40 -153.50 -144.83
Profit After Tax 274.60 292.90 282.50 292.71
Extraordinary Items -23.50 -26.30 0.00 0.00
Net Profit 251.10 266.60 282.50 292.71
Equity capital 538.50 538.50 538.50 538.50
Face value 10.00 10.00 10.00 10.00
EPS 4.66 4.95 5.25 5.44

6. Ratio Analysis
Particulars FY14A FY15A FY16E FY17E
EPS (Rs.) 18.12 19.12 21.27 23.49
EBITDA Margin (%) 88.74% 90.91% 90.50% 90.20%
PBT Margin (%) 21.32% 20.98% 19.79% 19.57%
PAT Margin (%) 15.61% 15.40% 13.68% 13.54%
P/E Ratio (x) 12.47 11.81 10.62 9.62
ROE (%) 15.98% 17.09% 15.75% 15.92%
ROCE (%) 11.82% 11.82% 11.73% 11.64%
Debt Equity Ratio 6.71 7.58 7.93 8.16
EV/EBITDA (x) 9.42 9.28 9.16 9.09
Book Value (Rs.) 113.37 122.63 135.02 147.52
P/BV 1.99 1.84 1.67 1.53
Charts

7. OUTLOOK AND CONCLUSION
At the current market price of Rs. 225.90, the stock P/E ratio is at 10.62 x FY16E and 9.62 x FY17E
respectively.
Earning per share (EPS) of the company for the earnings for FY16E and FY17E is seen at Rs.21.27 and
Rs.23.49 respectively.
Net Sales and PAT of the company are expected to grow at a CAGR of 14% and 10% over 2014 to 2017E
respectively.
On the basis of EV/EBITDA, the stock trades at 9.16 x for FY16E and 9.09 x for FY17E.
Price to Book Value of the stock is expected to be at 1.67 x and 1.53 x respectively for FY16E and FY17E.
We expect that the company surplus scenario is likely to continue for the next three years, will keep its
growth story in the coming quarters also. We recommend ‘BUY’ in this particular scrip with a target price of
Rs.260.00 for Medium to Long term investment.
INDUSTRY OVERVIEW
Global Economy:
The global economy continued to expand during 2014 at a moderate and uneven pace, as the prolonged
recovery process fro the global financial crises was still saddled with unfinished post- crises adjustments. Global
recovery was also hampered by some new challenges, including a number of unexpected shocks, such as
heightened geographical conflicts in various areas of the world.
Fiscal policy in the United States of America is expected to remain restrictive, but less severe than in 2014. Real
federal government spending is forecast to decline by less than 1 per cent in 2015–2016. It is also assumed that
the debt ceiling will be increased during the forecasting period.
In the baseline outlook, developing countries as a group are expected to grow at 4.8 and 5.1 per cent in 2015 and
2016, respectively, up from the 4.3 per cent estimated for 2014. Growth in the least developed countries (LDCs)
is expected to continue exceeding the global average, at 5.7 per cent in 2015 and 5.9 per cent in 2016. Among the
developed economies,the economy of United States, after some erratic fluctuations in 2014, is expected to
improve in 2015 and 2016, with GDP projected to expand by 2.8 and 3.1 per cent respectively.
Economic growth in South Asia is set to gradually pick up from an estimated 4.9 per cent in 2014 to 5.4 per cent
in 2015 and 5.7 per cent in 2016. While the recovery will be led by India, which accounts for about 70 per cent of
regional output, other economies such as Bangladesh and the Islamic Republic of Iran are also projected to see
stronger growth in the forecast period. Along with robust external demand, growth is expected to be

8. underpinned by a moderate strengthening of domestic consumptions and investments as countries bebifit from
improved macroeconomics conditions.
Financial Services
India has a diversified financial sector, which is undergoing rapid expansion. The sector comprises commercial
banks, insurance companies, non-banking financial companies, co-operatives, pension funds, mutual funds and
other smaller financial entities. The financial sector in India is predominantly a banking sector with commercial
banks accounting for more than 60 per cent of the total assets held by the financial system.
India's services sector has always served the country’s economy well, accounting for about 57 per cent of the
gross domestic product (GDP). In this regard, the financial services sector has been an important contributor.
The Government of India has introduced reforms to liberalise, regulate and enhance this industry. At present,
India is undoubtedly one of the world's most vibrant capital markets. Challenges remain, but the future of the
sector looks good. The advent of technology has also aided the growth of the industry. About 75 per cent of the
insurance policies sold by 2020 would, in one way or another, be influenced by digital channels during the pre-
purchase, purchase or renewal stages, as per a report by Boston Consulting Group (BCG) and Google India.
Government Initiatives
Several measures have been outlined in the Union Budget 2014-15 that aim at reviving and accelerating
investment which, inter alia, include fiscal consolidation with emphasis on expenditure reforms and continuation
of fiscal reforms with rationalization of tax structure; fillip to industry and infrastructure, fiscal incentives and
concrete measures for transport, power, and other urban and rural infrastructure; measures for promotion of
foreign direct investment (FDI) in selected sectors, including defence manufacturing and insurance; and, steps to
augment low cost long-term foreign borrowings by Indian companies. Fiscal reforms have been bolstered further
by the recent deregulation of diesel prices. The launch of ‘Make in India’ global initiative is intended to invite
both domestic and foreign investors to invest in India. The aim of the programme is to project India as an
investment destination and develop, promote and market India as a leading manufacturing destination and as a
hub for design and information. The programme further aims to radically improve the Ease of Doing Business,
open FDI regime, improve the quality of infrastructure and make India a globally competitive manufacturing
destination.
Road Ahead
India is today one of the most vibrant global economies, on the back of robust banking and insurance sectors. The
country is projected to become the fifth largest banking sector globally by 2020, as per a joint report by KPMG-
CII. The report also expects bank credit to grow at a compound annual growth rate (CAGR) of 17 per cent in the
medium term leading to better credit penetration. Life Insurance Council, the industry body of life insurers in the
country also projects a CAGR of 12–15 per cent over the next few years for the financial services segment.

9. Also, the relaxation of foreign investment rules has received a positive response from the insurance sector, with
many companies announcing plans to increase their stakes in joint ventures with Indian companies. Over the
coming quarters there could be a series of joint venture deals between global insurance giants and local players.
Disclaimer:
This document is prepared by our research analysts and it does not constitute an offer or solicitation for the
purchase or sale of any financial instrument or as an official confirmation of any transaction. The information
contained herein is from publicly available data or other sources believed to be reliable but we do not represent that
it is accurate or complete and it should not be relied on as such. Firstcall Research or any of its affiliates shall not be
in any way responsible for any loss or damage that may arise to any person from any inadvertent error in the
information contained in this report. Firstcall Research and/ or its affiliates and/or employees will not be liable for
the recipients’ investment decision based on this document.

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