Housing Development Finance Corporation Ltd. share price target

HDFC Q1 net profit falls 5% to Rs 3,052 crore, beats Street estimates HDFC has recorded 5% decline in the net profit to Rs 3051.52 crore in the quarter ended June 2020 (Q1FY2021), mainly driven bydecline profit on sale of investment and surge in provisions....

With improved affordability in last 2.5 decades, enhanced fiscal initiatives and credit linked subsidy scheme from government, we expect demand to pick up and hence reiterate our BUY rating on the stock, with a revised target price of Rs. 2,230, based on SOTP valuation. Skewed NIM due to negative carry on higher liquidity Net interest income increased by 10.2% YoY to Rs. 3,392cr, though NIM dropped to 3.1% in Q1FY21 vs. 3.3% in Q1FY20, impacted due to negative carry on account of significantly higher liquidity of Rs. 181cr. The Company recorded a cost-to-income...

HDFC's PAT declined by 5% YoY; however adjusted for dividend, sale of investments, net gains on assigned loans, provisioning and higher liquidity impact, PBT grew by 22% YoY. Asset quality improved sequentially with stage 3 assets for non-individual portfolio declined by 60bps QoQ. 22% book under moratorium compared with 26% in phase 1; however decline seems to be on lower side. Individual loan segment slowed down to 11% vs 14% while non-individual loan growth improved to 15% vs 6%. HDFC has conservative approach towards higher provisioning as gains from subsidiary investments utilized for contingent provisions. Provisions stood at Rs.122.85bn higher than regulatory requirement (Rs.44.5bn)....

HDFC Limited's results were mixed with better-than-expected operational results (benefitted by stake sale proceeds) and sequentially improved asset quality performance but the pace of loan growth slowed (understandably due to the lockdown) and moratorium book stood at 22.4% for overall loans; (from 26% earlier), the decline was lesser compared to other peers. Net interest income (NII, Calculated) came at Rs. 3,518.8 crore, up 5% y-o-y and came better than expectations, even though assets under management (AUM) growth slowed. PAT came at Rs. 3,052 crore (up 36.7% q-o-q but was down 4.7% y-o-y, as...

However, over the past two to three years, delinquencies have increased in the corporate book due to underlying stress in the Real Estate segment as well as the proactive recognition of some stressed accounts as NPLs. When the company reports windfall gains (from stake sales in subsidiaries), it uses 30% of these gains as incremental provisions. The company follows the policy of allotting one- third of gains as provisions, which has led to net additions of ~INR157b to the Strong internal accruals of INR155b post the dividend payout are in line with our We believe rating agencies comfort level on adequate leverage based on the product mix is likely to reduce across products in this cycle, especially considering the challenges witnessed in the NBFC space over the last two years and the credit events in large entities in the past.

HDFC's profitability declined by 22% YoY due to higher provisions; Asset quality deterioration along with Covid-19 provisions (Rs.5.5bn) resulted increase in provision (up 220% YoY). Non-individual portfolio surprised negatively for asset quality deterioration; however 26% book under moratorium seems to be lower as compared to other NBFCs (also few banks). Individual loan segment slowed down to 14% vs 16% while non-individual growth remains stable at 6%. HDFC has conservative approach towards higher provisioning as gains from subsidiary investments utilized for contingent provisions. Provisions stood at Rs.109.9bn higher than regulatory requirement (Rs.68bn). It should support asset quality...

Net interest income increased ~12% YoY to | 3563 crore, attributable to lower interest cost. Reported NIM came in at 3.4% up 10 bps QoQ. Advances (net) growth were at 10.9% YoY to | 450903 crore and 1% QoQ from | 426739 crore on the back of moderation in corporate book. Individual loan portfolio increased ~12.8% YoY to | 325923 crore and accounted for ~76% of the total loan book, growth in corporate book was 6.5% YoY to | 118165 crore (26.2% of book) being cautious for a while now. Growth in individual...

Profit on sale of investments stood at Rs 16.76 crore in Q4FY2020 compared with Rs 359.02 crore in Q4FY2019, while provision for expected credit loss jumped to Rs 1274.00 crore in Q4FY2020 from Rs 398.00 crore in Q4FY2019. PBT dipped 27% to Rs 2692.44 crore. An...

half of Mar'20 led to spike in individual NPAs COVID provisioning (Rs5.9bn; total provisions up 220%YoY) and weak other income (down 92%QoQ/38%YoY) dented Q4FY20 earnings for HDFC with reported PAT at Rs22.33bn (declined 73%QoQ/22%YoY). While NII grew 10%QoQ/12%YoY to Rs35.4bn, it failed to save PPoP that de-grew 67%QoQ/3%YoY. Loans at Rs4509bn stood in-line growing 11%YoY/2%QoQ. Pandemic shutdown contributed to asset quality woes (NPA ~2%) as...