Housing Development Finance Corporation Ltd. share price target

While the knowns in the form of higher base (listing gains from insurance biz:Q3FY18 & likewise from AMC listing: Q2FY19) dragged HDFC's PAT to Rs 21bn (PLe: 26bn), the miss came on account of lower than anticipated growth and elevated GNPAs (non-individual side). Subsequently, PPoP took a beating de-growing 61% YoY, however, low provisioning requirement supported the bottom-line. Loan growth of 17% YoY in individual loan book stood decent, but non-individual side slowed down for the quarter. Slight...

Value of new business (VNB) margin contracted by 50bps qoq to 24% vs. Emkay est. of 24.5% despite higher share of protection at 16.6% of annualized premium equivalent (APE) in 9M19 (vs. 16.2% in 1H9). This was mainly due to the lumpiness in expenses through new partner tie-up done in the quarter with Vijaya and Dena Bank given a lag between revenue and time taken in ramping up the account. The persistency ratio remained stable across cohorts except for the 61st month (-336bps...

HDFC is India's largest provider of housing finance, primarily focusing on retail housing.

Asset quality remained largely stable as Gross non-performing asset (NPA) ratio improved by 5 bps sequentially to 1.1%. Gross NPA ratio in corporate segment declined by 14 bps QoQ to 2.2% while in individual loans it stayed steady QoQ at 0.7%. Notably, HDFC has a miniscule exposure to IL&FS; (Rs400cr) and it is also in the form of lease rental discounting. We expect overall asset quality in its developer loan portfolio to remain stable in the medium term despite a weak market condition. Further, given HDFC's conservative lending policy along with 100%+ provision coverage ratio (PCR), we remain relatively comfortable on overall asset quality profile of the company and expect Gross NPA ratio to...

HDFC's Q2FY19 numbers are 12% above our expectations; however it is in line with street estimates. One off treasury income of Rs8.9bn, attributable to stake sale in its asset management subsidiary has offset the impact of higher provisions of Rs4bn during the quarter. Its AUM growth has maintained a decent pace of 17% YoY. Individual segment has grown at a tad higher rate of 18% as against 13% growth in nonindividual segment. Spreads are stable on a sequential as well as YoY basis. Dividend income from subsidiary is not comparable as it was accounted in Q1 in the current fiscal as against Q2 in the last fiscal. We retain our HOLD rating marginally tweaking our SOTP-based TP to Rs1,690 (Rs1,700 earlier), valuing parent business at Rs895 (2.5x...

ICICI Securities Ltd | Retail Equity Research HDFC Ltd's earnings increased 24.7% YoY to | 2467 crore. This was mainly led by strong other income traction, which included profit on sale of investments of ~| 1000 crore (stake sale in HDFC AMC) Net interest income increased 13% YoY to | 2412 crore. Reported...

HDFC is India's largest provider of housing finance, primarily focusing on retail...

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Life has come to a standstill in Kerala with flood and landslides leading to unforeseen miseries and chaos. Torrential rains, overflowing rivers and a series of landslides have resulted in death of 97 people in the state. Southern Railways and Kochi Metro have suspended their operations. Over 1.67 lakh people are rehabilitated in 1165 relief camps functioning in the state. This is a catastrophic event and would impact several businesses and agriculture activities within the state. The rub down effect of the same is expected to be felt on few of banks and NBFCs having sizeable exposure in...