 "Housing, Houses, Apartments, residential building")
India Shelter Finance share price: Shares of India Shelter Finance Corporation (India Shelter) has hit a new high of Rs 826.65, surging 8 per cent on the BSE in Monday’s intra-day trade on expectation of healthy earnings. Since February 3, in six weeks, the stock price of this smallcap housing finance company has appreciated 35 per cent.
The share price of India Shelter has surpassed its previous high of Rs 798 touched on September 13, 2024. The company made its stock market debut on December 20, 2023. Currently, it is trading 68 per cent higher over its issue price of Rs 493 per share.
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India Shelter provides affordable home loans and loans against property in Tier 2 and 3 geographies in India. India Shelter provides home loans to customers from low-and middle-income segments who are building or buying their first homes. The company has a strong distribution moat with its Pan India network in 15 states via 265 branches and maintains a granular portfolio. The company is being run by an experienced professional management team backed by marquee investors.
For the first nine months (April to December 2024) of financial year 2024-25 (9MFY25), India Shelter reported 59 per cent year-on-year (YoY) growth in its profit after tax (PAT) at Rs 270 crore, against Rs 170 crore in 9MFY24. Asset under management (AUM) grew 36 per cent YoY at Rs 7,619 crore supported by a disbursement growth of 28 per cent YoY to Rs 2,422 crore. The company delivered strong performance driven by a strong demand environment in the affordable housing segment.
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The management sees significant opportunities in the affordable housing segment and targets AUM of Rs 30,000 crore by 2030 (Rs 15,000 crore by FY28) driven by improved productivity, expanded branch presence, and higher ticket sizes. The company will continue to grow within its existing 15-state footprint, focusing on increasing branch presence in tier 3 and tier 4 locations by adding 40-50 branches annually, and targets a branch-count of ~500 by FY30.
In terms of AUM mix, the company is increasing exposure to semi-variable rate loans (39 per cent currently) to maintain Asset/liability management (ALM) stability, while Loan Against Property (LAP) is expected to remain at around 15 per cent of the overall portfolio. The management expects to deliver 17-18 per cent ROE in the next two years, supported by the moderating cost of funds (including a potential rating upgrade in the next 3-4 quarters), higher fee income, and increasing leverage, analysts at Emkay Global Financial Services said in a management meet update.
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To enhance efficiency and customer experience, the company is continuously upgrading its tech stack, improving turnaround time, streamlining the loan process, and enhancing collections. Overall, the management remains optimistic about growth prospects and is confident of consistent performance ahead, the brokerage firm said.
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