Indiabulls Housing Finance Ltd shares gained nearly 20% in intra-day trade on Thursday, i.e. 7 November, even as the company’s net profit fell 32% to Rs 702.18 crore in the second quarter ended September (Q2).
The stock got a boost from the government’s proposal to create a Rs 25,000 crore alternative investment fund for middle-income and affordable housing project that boosted sentiment for the shares of housing finance companies.
At 2:48 pm, shares of Indiabulls Housing Finance were trading at Rs 237.05, up 8%, after hitting a day’s high of Rs 219.40. Notably, the stock has corrected over 72% in the past one year.
Indiabulls Housing Finance on Thursday reported consolidated Q2 net profit of Rs 702.18 crore, down 32% year-on-year, while total income fell 24% to Rs 3,420.45 crore.
The company also announced that its board has approved the issuance of non-convertible debentures of up to Rs 10,000 crore, while also declaring an interim dividend of Rs 7 per equity share.
In an interview to CNBCTV18, Indiabulls Housing Finance VC and MD Gagan Banga said: "Our pre-provisioning operating profits, along with the other buffers that we carry, have put us in a position that whatever be the situation we should be able to handle it as we have handled the last 13 months.”
After the earnings announcement, brokerage firm Edelweiss Securities said Indiabulls Housing Finance's valuations would remain under pressure owing to weak real estate sentiment in the country and the rejection of merger proposal with Lakshmi Vilas Bank. “However, management is trying hard to reignite investor confidence by evaluating a potential buyback (subject to regulatory clarity) and a higher dividend (rate maintained at 50% levels),” the brokerage added.