HDFC is likely to post a 4.4 percent on-year growth in net profit for the March quarter to Rs 3,854 crore, according to a Moneycontrol average poll of three brokerage estimates, as against Rs 3,700 crore a year back.
HDFC, India’s largest housing finance company by market capitalisation, is seen reporting muted growth in the net profit for the quarter ended March due to a likely rise in provisions. However, the company is likely to see strong loan growth and healthy operational performance.
Net interest income (NII) is expected to rise nearly 5 percent on-year to Rs 4,752 crore, the average of estimates showed. The housing finance major is scheduled to release its earnings on May 4. The board might also consider dividends for existing shareholders in the meeting.
Brokerage Estimates
Kotak Institutional Equities expects HDFC to deliver 3.7 percent QoQ individual loan growth (16 percent YoY, 3.4-4 percent QoQ in the last three quarters), reflecting marginal weakness in retail disbursements. Overall, loan growth is lower at 11 percent due to slower growth in the non-individual segment. Core net interest margins (NIMs) will likely expand marginally (up 5 bps QoQ), reflecting recent rate hikes.
ICICI Direct expects HDFC to witness loan growth of 15 percent YoY to Rs 6,51,060 crore, led by healthy demand for home loans. Hence, growth in NII is seen at 15 percent YoY to Rs 5,024 crore. NIMs are likely to remain steady despite the competitive intensity. Provisions to decline marginally YoY at Rs 391 crore leading to standalone profit growth of 6.3 percent YoY (4.8 percent growth QoQ) to Rs 3,868 crore.
Motilal Oswal Securities expects healthy growth in HDFC’s asset under management (AUM) at 13 percent YoY. It estimates margins to remain largely stable sequentially. The pre-provision operating profit is set to grow 7 percent YoY, and credit cost is likely to be at 25 bps.
Stock Performance
HDFC Ltd stock has given a return of 5.26 percent since the beginning of 2023, outperforming the benchmark Nifty50 index which has lost 0.59 percent of its value since the beginning of this year.
However, on a five-year basis, the Nifty50 index has given a return of 70.37 percent, outperforming the HDFC stock by a considerable margin. The HDFC stock has only given a return of 46.15 percent during the same period.
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