Homes for the Homeless

A quick look at the 2011 census reveals that there were 1.77 million homeless people in India. The country was staring point blank at a challenge that looked pretty daunting by the sheer weight of its numbers. The overwhelming challenge was soon turned into a business opportunity by GIC Housing Finance. Back in 1989 the company was incorporated as ‘GIC Grih Vitta Limited’, four years later it was renamed “GIC Housing Finance” with the sole objective of lending directly to individuals and corporates in order to meet the growing demand for new homes in the country. GIC’s business model was based on its Vision to be a prominent corporate citizen in promoting housing activities through customer friendly finance schemes within a service oriented atmosphere. The company believes in wealth creation and strives to reward its shareholders by achieving growth in a competitive environment reflecting the ethical standards of a good corporate citizen.

Homing In On Performance

GICFL has been a stalwart in the field of housing finance with its robust presence across the length and breadth of the country even as big names like National Insurance Company Limited and The New India Assurance Company Limited stand rock solid as erstwhile promoters in its star studded success story. Share holders have been witness to GIC’s stupendous growth story even as its market cap stood at a nominal 1370 crores. The company posted positive double digit growth numbers for the Q4 FY16 both on a year on year and a quarter on quarter basis. While its standalone revenues have ramped up 5% to 233.48 crores against figures of 222.76 crores posted in the previous quarter EBITDA numbers stood at 210.4 crores which is 5.4% higher than the 199.6 crores posted earlier. EBITDA margins have grown as well with current figures of 90.12% against 89.6% in the previous quarter.

The company’s net profit stood at 35.87 crores against 30.59 crores in the previous quarter, a hike of 17.3% even as the company withered storms of higher taxes and interest payments. Performance on a YOY basis has been even more promising with a jump of 17.5% in its standalone revenues and a steep jump of 34.5% in the Company’s Net Profit figures. Yearly revenues for FY 16 grew by 19.6% to 874.44 crores against 730.91 crores the previous year. EBITDA margins have leapfrogged by 404% even as the company’s miscellaneous expenses dropped significantly.

Return on Investment

The outcome of its performance was reflected in the company’s stock prices which yielded 55% in two months between the 25^th of Feb 2016 and the 20^th of May 2016. Share prices soared from the lows of Rs. 181 to make a high of Rs.280. GIC has maintained its major sport around the Rs.181 mark which is its Week-12 support area according to DYNAMIC LEVELS. However the stock has its Month-1support at Rs.229.77 which might be a good area to buy given that the stock is currently trading at Rs.255 and would be available at a correction of 2.5ADM with the support of a 4 ADM gap level.