Dewan Housing Finance Corporation Limited (NSE:DHFL), operating in the financial services industry based in India, saw significant share price volatility over the past couple of months on the NSEI, rising to the highs of ₹679.25 and falling to the lows of ₹274.95. This high level of volatility gives investors the opportunity to enter into the stock, and potentially buy at an artificially low price. A question to answer is whether Dewan Housing Finance’s current trading price of ₹275.15 reflective of the actual value of the small-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Dewan Housing Finance’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.
Check out our latest analysis for Dewan Housing Finance
Is Dewan Housing Finance still cheap?
Great news for investors – Dewan Housing Finance is still trading at a fairly cheap price. My valuation model shows that the intrinsic value for the stock is ₹516.05, but it is currently trading at ₹275 on the share market, meaning that there is still an opportunity to buy now. What’s more interesting is that, Dewan Housing Finance’s share price is quite volatile, which gives us more chances to buy since the share price could sink lower (or rise higher) in the future. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.
Can we expect growth from Dewan Housing Finance?
Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. With profit expected to grow by 87% over the next couple of years, the future seems bright for Dewan Housing Finance. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.
What this means for you:
Are you a shareholder? Since DHFL is currently undervalued, it may be a great time to increase your holdings in the stock. With a positive outlook on the horizon, it seems like this growth has not yet been fully factored into the share price. However, there are also other factors such as capital structure to consider, which could explain the current undervaluation.
Are you a potential investor? If you’ve been keeping an eye on DHFL for a while, now might be the time to make a leap. Its buoyant future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy DHFL. But before you make any investment decisions, consider other factors such as the track record of its management team, in order to make a well-informed buy.