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