comparitive analysis of indiabulls housing finance ltd and
TRANSCRIPT
COMPARATIVE ANALYSIS OF INDIABULLS HOUSING FINANCE LTD AND IT’S COMPETITORS
-HARSIMAR SATIJA1311529
Indiabulls Housing Finance Ltd
2nd largest private housing finance company in India Highest rating of AAA from CARE ratings and
Brickworks Offer home loans at competitive rates Specially trained employees to guide the customer Committed to helping people realise their dream of
owning a home of their own Over 200 well appointed and accessible branches
across 100 cities across India
HDFC
Leading provider of housing finance in India Gross loans of Rs. 2.2 trillion Extensive distribution network of 370 offices across
2400 cities in India Strong asset base of over Rs. 2.7 trillion Stable and experienced management team
LIC Housing Finance
One of the largest housing finance companies in India
Provides long term finance to people for residential purpose
Authorised capital of Rs. 150 crores Most extensive marketing network in India 7 regional offices,16 back offices and 207 marketing
units across India
GRUH Finance
Subsidiary of HDFC Ltd. Rate of interest based on credit score methodology Rated FAAA by CRISIL and MAAA by ICRA 159 offices in 8 states across India Offer multiple options of amortisation and interest
calculation
Comparative Analysis
• Current Ratio
• Debt-Equity Ratio
• ROCE
• PAT Margins
• EPS
• Interest Coverage
• Market Cap.
Current Ratio
Measures a company's ability to pay short-term obligations.
Mainly used to give an idea of the company's ability to pay back its short-term liabilities (debt and payables) with its short-term assets (cash, inventory, receivables).
Higher the current ratio, the more capable the company is of paying its obligations.
A ratio under 1 suggests that the company would be unable to pay off its obligations if they came due at that point.
Current Ratio = Current Assets/Current Liabilities
Current Ratio
CompanyCurrent Ratio
IBHFL 1.6HDFC 1.55LIC hsg finance 3.98GRUH finance 4.5
IBHFL HDFC LIC hsg finance
GRUH finance
00.5
11.5
22.5
33.5
44.5
5
Current ratio
Debt-Equity Ratio
Measure of a company's financial leverage calculated by dividing its total liabilities by stockholders' equity.
Indicates what proportion of equity and debt the company is using to finance its assets
A high debt/equity ratio means that a company has been aggressive in financing it’s growth with debt
Debt- Equity ratio = Total liabilities/Shareholder’s equity
Debt-Equity Ratio
Company Debt-Equity
IBHFL 5.19HDFC 4.02LIC hsg finance 9.49GRUH finance 9.1 IBHFL HDFC LIC hsg
financeGRUH
finance0123456789
10
Debt-Equity
ROCE
Financial ratio that measures a company's profitability and the efficiency with which it’s capital is employed.
higher ROCE indicates more efficient use of capital ROCE should be higher than the company’s capital
cost ROCE= EBIT/Capital Employed Capital Employed=Total Assets-Current Liabilities
ROCE
Company ROCE
IBHFL 18.08%HDFC 16.72%LIC hsg finance 12.50%GRUH finance 14.20% IBHFL HDFC LIC hsg
financeGRUH
finance0.00%2.00%4.00%6.00%8.00%
10.00%12.00%14.00%16.00%18.00%20.00%
ROCE
PAT Margins
Financial performance ratio, calculated by dividing net income after taxes by net sales.
More stringent because it takes taxes into account. Tells investors the percentage of money a company
actually earns per rupee of sales PAT margins= (PAT/sales)*100
PAT Margins
Company PAT margin(PAT/Sales)
IBHFL 28.80%HDFC 22.50%LIC hsg finance 14.34%GRUH finance 20.92% IBHFL HDFC LIC hsg
financeGRUH
finance0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
30.00%
35.00%
PAT margin
Interest Coverage
used to determine how easily a company can pay interest on outstanding debt.
calculated by dividing a company's earnings before interest and taxes (EBIT) of one period by the company's interest expenses of the same period
The lower the ratio, the more the company is burdened by debt expense.
A ratio under 1 means that the company is having problems generating enough cash flow to pay its interest expenses.
IC = EBIT/Interest
Interest Coverage
CompanyInterest Coverage
IBHFL 1.59HDFC 1.46LIC hsg finance 1.23GRUH finance 0.93 IBHFL HDFC LIC hsg
financeGRUH finance
0
0.2
0.4
0.6
0.8
1
1.2
1.4
1.6
1.8
Interest coverage
Earning per share
Portion of a company's profit allocated to each outstanding share of common stock.
Serves as an indicator of a company's profitability. Major component used to calculate the price-to-
earnings valuation ratio. EPS= Net income/Average outstanding shares
Earning per share
IBHFL HDFC LIC hsg finance
GRUH finance
₹ 0.00₹ 5.00
₹ 10.00₹ 15.00₹ 20.00₹ 25.00₹ 30.00₹ 35.00₹ 40.00₹ 45.00₹ 50.00
EPSCompany EPS
IBHFL ₹ 46.30HDFC ₹ 34.86LIC hsg finance ₹ 26.10GRUH finance ₹ 9.82
Market Cap.
Total dollar market value of all of a company's outstanding shares
Calculated by multiplying a company's shares outstanding by the current market price of one share.
Investors use this to determine a company's size, as opposed to sales or total asset figures.
Market Cap.
Company Market cap.
IBHFL ₹ 19,849.31HDFC ₹ 1,94,386.39LIC hsg finance ₹ 21,173.14GRUH finance ₹ 8,595.85 IBHFL HDFC LIC hsg
financeGRUH
finance₹ 0.00
₹ 50,000.00
₹ 100,000.00
₹ 150,000.00
₹ 200,000.00
₹ 250,000.00
Market Cap.
Conclusion
Indiabulls Housing Finance has performed well during the FY 2013-2014 and has emerged as the second largest housing finance company in the private sector by assets. The consolidated net worth of the company stands at Rs.5639 crores which makes it one of the best capitalised HFC. It has been awarded with the “Housing Finance Company of the Year 2013-2014” by ASSOCHAM.
Bibliography
Annual reports of the respected companies. www.moneycontrol.com www.Investopedia.com