Make money with SKS Microfinance & Indiabulls Housing Fin: Yogesh Mehta, MOSL

In a chat with ET Now, Yogesh Mehta, MOSL, shares his wealth creation ideas, Edited excerpts

ET Now: Walk us through your top wealth creation ideas in a very sticky market like this?

Yogesh Mehta: Markets are very sticky and remain range bound but yes there are stock specific activities which are getting boosted. as a market. One of the ideas which I wanted to discuss on a fundamental note is SKS Microfinance. It is the largest microfinance company in terms of lending to only small businesses other than personal consumption. We think that after that Andhra Pradesh crisis and post the RBI amendment on the way they have taken over the decision and now the control is under them, we believe that AUM will grow over 48-49 per cent in the next two to three years and in turn PAT will grow by say at least 43 per cent over next two to three years. So combining these two, PAT would be around Rs 440 crore for FY17. Currently for this financial year, it is Rs 300 crore and we expect that price target would be Rs 712 based on four times FY18 book value.

ET Now: What about Indiabulls Housing and why does this appeal to you?

Yogesh Mehta: Indiabulls Housing Finance is the fourth largest housing finance company in India and AUM is around Rs 52,200 crore. We think the loan portfolio is now about 52 per cent into housing and 25 per cent in loan against property. The company is consistently delivering 23-25 per cent growth since last three years. We believe that it will continue and looking at positive scenario, Rs 900 would be the price target based on three times FY17 book value. Dividend yield is at 5.4 per cent. The financial ratios are also very strong and delivering good numbers. So this is the target and current market price is Rs 712.