Housing Development Finance Corporation Ltd. share price target

HDFC's Q4FY17 PAT at Rs20 bn (up 32% YoY after adjusting for Q4FY16 one-offs) was in line with our expectation.Stringent cost controls helped set off impact of high-than-expected provisions.

We met the management of HDFC to get an insight into the company and the housing finance industry. With regard to usual business parameters like loan growth, margins and asset quality, the company maintained that steady performance would continue ahead. Demonetisation impacted the business temporarily but now normalcy has returned. Loan against property (LAP) accounts for ~5% of the individual loan book at ~| 11000 crore. The company has been less aggressive in the LAP space compared to other companies. This is due to focus on lending against residential...

Background: HDFC, incorporated in 1977, is the largest mortgage financier in India with a balance sheet size of INR 4.7tn. HDFC has grown consistently, at a measured pace, without compromising on asset quality and is one of the best managed companies in India. The Individual loans share in core business lending is at 73%. Besides mortgage financing, the company has, through its various subsidiaries, successfully ventured into other businesses including Banking (HDFC Bank), Life and Non-life insurance (HDFC Standard Life and HDFC Ergo), Asset Management (HDFC Mutual Fund) and Call center (Intelenet). HDFC has consistently maintained...

Over the last few years, HDFC has proven its competitive edge over its peers through decent growth in business, stable spreads, well-managed asset quality and better performance in other financial business arms. Consequently, the stock traded at a premium to its peers with best-inclass return ratios. Looking ahead, we expect further improvement in operating performance on the back of healthy loan book and NII growth. Rolling over our estimates to FY19E, we reiterate our BUY recommendation on the stock with a revised Target Price of Rs1,786, valuing the standalone entity at 3.1x FY19E adjusted BV and subsidiaries fetching Rs773/share (after...

HDFC Ltd's results were largely in line with estimates. Standalone PAT increased 20% QoQ to | 2044 crore. The decline in PAT of ~22% YoY is owing to large one-off gains last year owing to stake sale in the insurance business. Adjusted PAT was up 14% YoY. Full year PAT stood at | 7,443 crore compared to | 7,093 crore in the previous year. Consolidated PAT for FY17 was | 11051 crore against | 10190 crore in FY16. The share of profit from subsidiary and associate companies in the consolidated PAT was ~33% in FY17...

HDFC's PAT of Rs17 bn (+12% YoY) was in line with expectation. Advances grew 16% YoY led by ~18% growth in non-individual loans. Retail loan growth was healthy at 15%YoY given the circumstances prevailing during Q3.NIM improved 10 bps QoQ to 3.95% with a shift in mix towards non-individual portfol..

HDFC, incorporated in 1977, is the largest mortgage financier in India with a balance sheet size of INR 4.3tn. HDFC has grown consistently, at a measured pace, without compromising on asset quality and is one of the best managed companies in India. The Individual loans share in core business lending is at 73%. Besides mortgage financing, the company has, through its various subsidiaries, successfully ventured into other businesses including Banking (HDFC Bank), Life and Non-life insurance (HDFC Standard Life and HDFC Ergo), Asset Management (HDFC Mutual Fund) and Call center (Intelenet). HDFC has consistently maintained one of...

ICICI Securities Ltd | Retail Equity Research PAT increased 11.9% YoY to | 1701 crore, in line with our estimate. Consolidated PAT was at | 2728 crore vs. | 2419 crore in Q3FY16, up 12.8% YoY. The share of profit from subsidiary and associate companies in consolidated PAT was at ~32% in Q3FY17 Net interest income growth remained strong at 19% YoY to | 2502 crore. Margins increased ~10 bps QoQ to 3.95% Advances grew higher than estimate at 15.6% YoY to | 286876 crore,...

Over the last few years, HDFC has proven its competitive edge over its peers through decent growth in business, stable spreads, well-managed asset quality and robust performance in other financial business arms. Consequently, the stock trades at a premium to its peers with best-in-class return ratios. We expect further improvement in operating performance in coming quarters on the back of healthy NII growth and listing of insurance arm. Thus, we maintain our BUY recommendation on the stock with a revised Target Price of Rs1,580, valuing the standalone entity at 3.5x FY18E adjusted BV and subsidiaries fetching Rs615/...