HDFC nos in-line; provisions to not affect biz: Analysts

HDFC has posted results in-line with the market expectations. Net profit has gone up to Rs 2,607 crore as opposed to Rs 1,862 crore year-on-year basis. The loan book of HDFC has climbed 13.6 percent to Rs 2.59 lakh crore as on March 31.Experts maintain that there are no negative surprises from the result. Deven Choksey, MD at KRChoksey Investment Management says that the result book is in place and future shock will be less for HDFC. He expects the loan book to grow by 15-16 percent in FY17. Siddharth Purohit of Angel Broking, shares similar views and has expected the profit to be around Rs 2,000 crore. The special provisioning made is not very high and will not impact the business going forward, adds Purohit. He, too, expects loan book growth to be decent.Below is the transcript of Deven Choksey and Siddharth Purohit's interview with CNBC-TV18's Ekta Batra.Q: We just have one figure with us right now we are still awaiting more details on HDFC, but your first take?Choksey: I think on the face of it result is basically sound inline with expectation, so the numbers are probably quite aligned to the expectations of Rs 2,500 crore plus. According to me, one could give thumbs up to the number, per se. Stake sale number of Rs 1,520 crore that is also by and large understood, so I don't see anything else. May be, we will have to wait and see larger amount of details on few things.Q: What is your take on that particular provision figure an additional provision which they have made this quarter?Choksey: I think we have to wait and get the detail out from the company on this particular amount and the treatment that they have given this quarter, which is an exceptional treatment. I was about to make a point that Rs 545 crore may have some amount of exceptional items and this appears to be so, may be it could be the item pertaining to what we call the provision which is required to be done for the developer side of the activity, but let us wait for the details to come out from the management.Q: First take would be that it's a largely okay set of numbers, I mean just based on what we were reported as of now or what we have as of now, it is largely a good set of numbers or inline set of numbers?Choksey: No negative surprises, first point and at the same time as rightly observed, on one side you have stake sale on investments and another side that you are providing for additional amount. So, in a way, you are keeping the books in place and at the same time the future shocks in this particular activity could be less, so it is a good point as I would call it. The overall result appears to be in line with larger amount of expectation.Q: In terms of loan book growth that has been something of a bit of a concern for HDFC, for example, it was up around 13 percent odd as of 9 months of FY16. Your sense in terms of whether FY17 would see an incremental pick up for HDFC in the loan book?Choksey: Well, that should be the expectation. On one side the residential property development is continuing in the economy and that\\'s where with the fall in the interest rates definitely lower EMI should spur the higher amount of growth in case of real estate sale, so one could possibly expect this 14-15 percent kind of loan book growth could possibly move northwards of 15 percent and above kind of level going forward in FY17, but again one will wait and see what management has to speak about on this subject, but overall it appears to be northwards of 15 percent plus kind of a growth possible in FY17.Q: We just have a couple of details as of now, the bottom line primarily what if you have made of it, largely inline?Purohit: We were expecting close to Rs 2,000 crore profit on the core operations basically, which was a growth of 8 percent and if you observe there is an extraordinary income from the stake sale to the tune of Rs 1,519 crore and out of that the management has taken extra buffer provision to the tune of Rs 450 crore odd, which they had already indicated couple of weeks before in fact, so it's not a negative surprise as far as provisioning is concerned and that provisioning is largely towards strengthening the balance sheet and is done on the standard assets, so it is definitely not a negative, so the fourth provision actually doesn't seem to be very high, if you exclude that extraordinary provision then possibly the provisioning number also is not really very high, so there is no negative. I would see that the growth even during this quarter also has been quite decent, it has not picked up, but it has not slowed down also.Q: So what is it as per your calculation?Purohit: I mean what we are expecting was close to Rs 2,000 crore as I told you and if you exclude the other income part and this extraordinary provision part then possibly numbers are more or less inline, there is no negative and I don't see any really surprising rise in provisioning, if I exclude that extraordinary provision then there is not much of provisioning increase as well on quarter-on-quarter basis, so there is not much of negativity, I would see there is hardly any negative point to be taken from this.