Housing Development Finance Corporation Ltd. share price target

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HDFC sec Q4FY19 Results Review For the fourth quarter of FY19, the corporate performance has improved vis--vis the comparable quarter last year as per Care Ratings. The results of a sample of 2,646 companies suggest that the net sales have grown at 9.4% compared with 8.4% in Q4FY18. Likewise, the aggregate net profits of these companies have registered a growth by 8.9%, higher than the 7.5% growth in Q4FY18. The profit margins have more than doubled from 2.3% in Q4FY18 to 4.9% in Q4FY19.

HDFC Ltd has been a consistent performer, maintaining loan spreads of 2.29-2.33% loan spreads since last 5 years, across interest rates cycles. It also enjoys the industry's best rating (CRISIL AAA/Stable), due to its healthy asset quality (GNPA at a stable 1.18%) and a diversified and stable resource profile. We believe that...

HDFC's Q4FY19 PAT has grown by 27% ( 23% above our estimates), attributable to higher growth in non-interest income. AUM growth has slowed down to 15% as against 19% last year. Such a slowdown is attributable to muted growth of 8% in non-individual segment and growth of 17% in individual segment. Spreads are steady at 2.3%. Despite modest loan growth, GNPA is flattish sequentially at 1.2%, with stable numbers across segments. We have largely retained our numbers for FY20. Given the challenges in its core housing finance business, we retain our REDUCE rating with a SOTP based TP of...

During the quarter, net interest income (NII, Calculated) increased by 19.3% y-o-y to Rs. 3,161.1 crore backed by loan growth of 12.1% y-o-y. Net interest margin (NIM, including income on loans sold) was stable at 3.30% y-o-y; however, it was down by 20BPS q-o-q. Interest spread improved to 2.30% (up by 4 BPS q-o-q) mainly benefitted by PLR hikes that the...

On asset quality front, HDFC reported marginally improvement in asset quality QoQ with GNPA ratio declining ~4 bps to 1.18%. GNPA in nonindividual/ corporate witnessed improvement of ~12 bps QoQ to 2.34%, while individual loans GNPA remained steady at 0.7%. As per IND AS accounting, assets classified into Stage 3 category remained broadly steady on sequential basis at | 5743 crore vs. | 5618 crore in Q3FY19. Operational performance remain stable, attributable to higher other income & healthy NII. Other income was aided by extra ordinary gains from stake...

Rs57.7bn) on back of strong NII growth of ~23% and lower provisioning as in certain segments which grew at 19% YoY, while overall loan growth was supported by non-retail which were largely short term in nature (some NCLT...

HDFC's Q3FY19 AUM growth has slowed down to 15% as against 17% last quarter and 19% in corresponding quarter last year. Such a slowdown is attributable to muted growth of 8% in non-individual segment and growth of 17% in individual segment. Spreads are steady at 2.26%. PAT (9% below expectations) is not comparable on YoY basis as Q3FY18 includes gains from stake sale of life insurance subsidiary of Rs52.5bn. GNPA increased 9bps sequentially to 1.2% largely due to deterioration in non-individual segment. We have cut our net loan growth for FY19 to 15% as against 17% earlier. We have cut our earnings estimates by 2.5% for FY19/20. Given the recent rally in the stock...

Net interest income declined ~6% YoY to | 2685.6 crore, due to higher interest expenses. Margins declined ~10 bps QoQ to 3.2%, while spread remained broadly steady at 2.26% Overall credit growth came in slower compared to the previous run rate at 13.1% YoY to | 385520 crore, on the back of declining individual & corporate growth. Individual loan portfolio increased ~15% YoY to | 270972 crore and accounted for 70% of total loan book. Trajectory of corporate loans fell to single digit at 7.3% YoY...

Housing Development Finance Corporation Ltd.'s net profit misses market estimates for the quarter ended December HDFC registered a 20% rise in standalone Interest income to Rs 10555.18 crore in the quarter ended December 2018. A 22% rise in interest expenses to Rs 7258.61 crore saw net interest...