Housing Development Finance Corporation Ltd. share price target

HDFC's restructured assets increased to 1.4% (vs 0.9% Q1FY22) of AUM which comprises of 63% Individual loans and 37% non-individual loans. Gross stage 3 assets declined to 2.5% vs 2.6% QoQ (vs 2.2% YoY) led by better collection efficiency. The overall collection efficiency ratio for individual loans has remained stable at 98% in Sept'21. PAT grew by 32% YoY (up 26% QoQ) led by higher other income (up 123% YoY). NII grew by 13% YoY led by improvement in margins while PPoP grew by 29% YoY. Disbursements for individual loan segment grew by 44% YoY in Q2FY22; Oct'21 disbursements highest ever in a non-quarter end month. Provisions stood at Rs.133.4bn...

HDFC reported 2QFY22 PAT (in-line) of INR37.8b, up 32% YoY / 26% QoQ. The increase was primarily driven by lower credit costs of 31bps (which stood at INR4.5b, against the expectation of INR6b). NII (in-line) grew 14% YoY to INR41.1b. Reported spreads stood at 2.29% and were stable QoQ. Assignment income was lower than expected and stood at INR1.3b v/s our estimate of INR4.1b. Gross Stage 2 and Stage 3 declined to 8.67% v/s 9.24% a quarter ago....

Profit before tax for Q1FY2022 stood at Rs 3905 crore compared to Rs 3607 crore in the previous year. The profit numbers for Q1FY2022, however, are not directly comparable with that of the previous year for the reasons such as Profit on Sale of Investments at Rs 263 crore in Q1FY2022 compared with Rs 1241 crore in Q1FY2021, dividend Rs 16 crore (Rs 298 crore) and charge for employee stock options Rs 146 crore (Rs 1 crore). Also the effective tax rate has been higher at 23.1% compared with 15.4% in Q1FY2021. In the previous year, the tax on capital gains on sale of equity shares was low on account of grand...

HDFC's core PBT grew 12% YoY to INR32.2b (5% beat). NII (ex-assignment income) at INR41.3b was 2% above our estimate. On the other hand, provisions at INR6.9b were lower than our est. of INR8b. Better-than-expected...

HDFC's gross stage 3 assets increased to 2.6% vs 2.34% QoQ (vs 2.2% YoY) better than its peer (LICHF at 5.93%). Restructured assets stood at 0.9% (vs 0.8% FY21) of AUM which majorly comprises of one large real estate builder group (62% of restructured). The overall collection efficiency ratio for individual loans has improved during the June month to preCOVID levels and stood at 98.3% vs 98% in March'21. PAT declined by 2% YoY (down 6% QoQ) led by higher tax bracket due to tax on capital gains on sale of equity was lower (23% vs 15% YoY). NII grew by 22% YoY led by improvement in margins. PPoP declined by 4.5% YoY due to higher operating expenses (up 39% YoY). Disbursements for individual loan segment grew by 181% YoY in July month; highest ever in a non-quarter month. Provisions...

What should investors do? HDFC Ltd's share price has grown ~80% over the past five years. Market leadership, funding advantage and adequate capital lead us to remain positive on fundamentals....

in Q4FY2021. The company has posted healthy 18% surge in operating profit to Rs 4645.14 crore in Q4FY2021, driven by an improvement in net interest margins. However, the cost to income ratio rose to 9.7% in Q4FY2021 from 8.0% in Q4FY2020. The loan...

HDFC's asset quality remains stable with gross stage 3 assets stood at 2.34% vs 2.28% QoQ (vs 2.28% YoY) better transit over Covid -19 impact. Also, restructured assets stood at 0.8% (lower than 0.9% Q3FY21) of AUM which majorly comprises of one large real estate builder group (0.5% of AUM). PAT grew by 42% YoY (up 9% QoQ) led by lower ECL provisions (down 44% YoY). NII grew by 14% YoY led by improvement in margins. On adjusted basis for FY21, PBT grew by 19% YoY. Collection efficiency for individual loans for March month stood at 98% vs 97.6% for December month. Disbursements for individual loan segment grew by 60% YoY reflects housing demand remains robust. March 2021 witnessed the highest ever...

Robust pick up in individual disbursement at 60%, margin expansion of ~10 bps and collection efficiency at 98% reflect healthy revival in individual business which comprises ~74% of gross loan book. We remain positive on earnings visibility given 1) business growth led by market leadership, 2) adequate capital of 22.2%, 3) funding advantage and 4) healthy provision buffer. Healthy performance in subsidiaries would aid consolidated earnings. Stake sale in HDFC Ergo (to reduce stake as per regulatory regime) could lead to one off inflows. We expect earnings to grow at 14.6% CAGR...

HDFC's core PBT grew 19% YoY to INR33.4b (estimate of INR34.2b) of). NII (ex-assignment income) at INR40.3b was 4% above our estimate. On the other hand, provisions at INR7.2b were much higher than our est. of INR3.8b. Better-than-expected MTM gains on investment led to a 12% beat on reported PAT (+9 QoQ /42% YoY). For FY21, core PBT / core operating profit grew a healthy 15%/17% YoY to INR126b/INR146b, despite an additional ESOP charge of INR3.4b. Strong disbursement growth (on a low base) of 60% YoY, stable QoQ...