HDFC Q1FY14 net profit seen up 20%

Moneycontrol Bureau

India's largest mortgage lender Housing Development Finance Corporation"s (HDFC) net profit in first quarter (April-June) is likely to grow by 20 percent year-on-year to Rs 1,200 crore. Net interest margin or the difference between interest earned and paid out, may increase at a similar pace to Rs 1,564 crore, according to a CNBC TV18.

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The housing finance company is expected to expand its loans by 19-20 percent year-on-year (y-o-y) during the three-month period. The lender may see an incremental increase of 4-5 percent quarter-on-quarter.

HDFC had reported a forecast-beating 17 percent year-on-year rise in its fourth quarter (January - March) net profit to Rs 1,555 crore. On that day, HDFC shares had hit 52 week high on NSE at Rs 895. Since last one year, HDFC shares rose nearly 20 percent as against a rise of about 16 percent in the 50-share Nifty – the broader index.

Its credit book expanded by nearly 21 percent y-o-y to Rs 1.70 lakh crore. The composition of loan book were segregated into: individual loans of around Rs 1.11 crore, corporate credit of around Rs 57,000 crore and others at Rs 1,770 crore.

"We do not expect any ugly surprise from the housing finance major. It is likely to be stable and persistent performance. Investors are currently looking for an opportunity to buy the scrip but at a reasonable valuable. However, it has to be seen whether the lender is getting stress from retail loans, although home loan borrowers tend to repay their loans right in time," said an investor relation manager with a large domestic brokerage. He did not wished to be named. 

However, the only challenge HDFC faces currently is to sustain the growth momentum. According to its vice-chairman and CEO Keki Mistry, the lender is unlikely to see sharp fluctuation in its business growth.

"We will target individual loan growth of 18-20 percent over a sustained period of time on a CAGR basis. It might however, be a little higher or lower in certain years," he had told moneycontrol.com in an exclusive interview.

saikat.das@network18online.com