Housing Development Finance Corporation Ltd. share price target

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...

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...

We maintain our HOLD rating on the stock, with a revised target price of Rs. 2,550, based on SOTP valuation. NIM remains flat sequentially; One-time gain boosts net profit Net interest income increased by 8.6% YoY to Rs. 3,240cr, while NIM remained at 3.3% in Q3FY20 vs. 3.3% in Q2FY20 and 3.4% in Q3FY19. Profit before tax grew to Rs. 9,143cr from Rs. 2,869cr in Q3FY19, driven by Rs. 9,020cr one-time fair value gain from merger of GRUH Finance with Bandhan Bank, partially offset by higher provisions to Rs. 2,995cr from Rs. 116cr for same quarter last year. One-time gain due to...

HDFC Ltd. net profit for the December quarter rose nearly four times to `8,372Cr from `2,114Cr a year ago on the back of fair value gain it took into account for the sale of subsidiary Gruh Finance to Bandhan bank. Loan book growth of 14% was driven by Individual loans growing at 16%, while developer credit slowed to 6%, marginally up from 3% QoQ. NIMS remained constant at 3.30% QoQ. However, its asset quality inched...

Given the unfavourable lending environment, advances growth continue to remain slower at 12.4% YoY to | 431600 crore, led by moderation in corporate book. Though the individual loan portfolio increased ~17% YoY to | 318520 crore and accounted for ~72% of the total loan book, growth in corporate book was curtailed during the quarter at 7% YoY to | 115430 crore (26.1% of book). Growth in the individual loan book, after adding back loans sold in the preceding 12 months, remained healthy at 24% YoY. Asset quality was stable during the quarter with GNPA ratio up ~3 bps QoQ...

provisioning while making provisions of Rs 2995 crore in Q3FY2020. The company has maintained stable asset quality, margins and spread, while improved loan growth in Q3FY2020. Operating expenses of the company have increased 13% to Rs 373.91 crore against 5% growth in total income to Rs 3494.69 crore, leading to increase in cost-toincome ratio to 11.0% in Q3FY2020 from 10.2% in Q3FY2019....

HDFC reported strong profitability higher than market estimates with stable loan growth and improvement in margins sequentially. PAT grew 3x YoY (1x QoQ) led by treasury gain on stake sale in Gruh. The Non-Individual book growth improved a bit to 6% vs 4% (Q2FY20), while Individual book grew ~16%. Despite the challenges in its core housing finance business, HDFC is able to garner its individual book and maintain asset quality at decent levels. We expect the same trend to continue and return ratios to improve once normalcy returns within the sector. Hence, we give ACCUMULATE rating on the stock with a SOTP based TP of Rs2,625 valuing parent business at Rs1,409 (3.1x...

HDFC reported another quarter of consistent performance with healthy AUM growth of ~14% YoY, stable spreads of ~2.3% and largely flat GS3% of 1.6%. While NII grew 11% YoY, lower assignment income (INR1.7b v/s INR2.6b YoY), higher opex (+14% YoY) and provisions led to flat core PBT. We expect core RoAA of 1.9% and RoE Note that retail lending growth has remained healthy at 16- 18% with stable individual spreads of ~1.9% since the IL&FS; crisis. Over the past four quarters, HDFC has maintained steady retail loan growth of 16-17% YoY while curtailing wholesale disbursements the share of wholesale loans in overall AUM is down 200bp to 24%. We expect the company to largely maintain spreads as the cuts in home loan rates are offset by declining cost of funds and opportunistic non-individual loan growth. HDFC will continue to effectively We keep our earnings estimates largely unchanged and expect the company to report core PBT CAGR of ~10% over FY20-23.

We are increasing our target price for HDFC to Rs2568 (Rs2361 earlier) on Change in Estimates | Target | Reco in retail lending and bottoming of developer loan cycle. We expect (a) 16.5%...