HDFC may post Q4 PAT at Rs 1812 cr, up 5.1%: Motilal Oswal

Motilal Oswal has come out with its fourth quarter (January-March) earnings estimates for the financial sector. The brokerage house expects Housing Development Finance Corporation (HDFC) to report a 27.1 percent growth quarter-on-quarter (growth of 5.1 percent year-on-year) in net profit at Rs 1811.8 crore.

Net interest income is expected to increase by 24 percent Q-o-Q (up 16.8 percent Y-o-Y) to Rs 2501.3 crore, according to Motilal Oswal.

Motilal Oswal's Report on HDFC:

HDFC’s loan growth (net of sell-downs) is likely to remain healthy at 16.1 percent YoY and 4 percent QoQ.

Spreads should largely be stable at 2.3 percent levels. HDFC has not changed the home loan rates during the quarter.

NII is likely to remain strong at INR25b, registering a growth of 16.8 percent YoY.

Non-interest income is likely to de-grow at 15 percent YoY. During the quarter, HDFC will book the remaining proceeds of profit on sale of investments in HDFC Life.

Asset quality is likely to witness seasonal improvement. In 3QFY15, GNPAs were 0.69 percent on 90-day overdue basis.

We model provisions of INR450m v/s INR300m seen in 4QFY14.

The stock trades at 5.3x FY16E AP/ABV and 4.6x FY17E AP/AEPS (price adjusted for value of other businesses and book value adjusted for investments made in those businesses).

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