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Last Updated : May 14, 2019 11:56 AM IST | Source: Moneycontrol.com

What should investors do with HDFC after Q4 results: buy, sell or hold?

Most brokerage firms have maintained their rating on HDFC after it posted its Q4 numbers

 
 
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Most brokerage firms maintained their rating on HDFC after March quarter results as the mortgage lender reported the fourth quarter standalone net profit at Rs 2,861.6 crore and revenue at Rs 11,580 crore.

The results are not comparable to earlier earnings as the company has shifted to new accounting standards. The corporation has adopted Indian Accounting Standards (Ind-AS) from April 1, 2018, and the effective date for such transition is April 1, 2017.

The board has recommended a final dividend of Rs 17.50 per share.

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During the quarter, the net interest income improved to Rs 3,161 crore, HDFC said in a statement. On the asset quality front, gross NPA was at 1.18 percent. Individual gross NPA was at 0.70 percent and non-individual gross NPA at 2.34 percent.

The company's Q4 net interest income (NII) rose to Rs 3,183.3 crore. The company's loan growth stood at 13.8 percent. The net interest margin was down at 3.3 percent.

Here’s what global brokerage firms recommend on HDFC post Q4 results:

Macquarie: Outperform| Cuts target to Rs 2,350

Macquarie maintained its outperform rating on HDFC but slashed its target price to Rs 2,350 from Rs 2,400 earlier.

The growth slowdown was led by corporate loans, Macquarie said. There is no deterioration in the asset quality that underscores underwriting prowess. The global investment bank slashed FY20-21 EPS estimate by 1-5 percent as it lowered net interest margin (NIM) forecasts.

Deutsche Bank: Buy| Target: Rs 2,300

Deutsche Bank maintained its buy rating with a target price of Rs 2,300. The mortgage lender displayed stable core trends and the asset quality also improved, it said.

The AUM growth was stable at 15 percent. In terms of loan growth, which was slightly lower at 11 percent, the mortgage lender is well placed to navigate the current adverse cycle, said the note. Deutsche Bank expects stable NIM trends in FY20.

CLSA: Buy| Target raised to Rs 2,500

CLSA maintained its buy rating ion HDFC and raised its target price to Rs 2,500 from 2,360 earlier.

Superior access to funds will support growth, it said, adding the net profit was ahead of estimates with better NII and treasury income.

The loan growth should improve with an uptick in disbursements. CLSA expects a steady rise in core earnings and ROE expansion. It sees a 16 percent loan CAGR over FY19-21 which will drive earnings growth.

Disclaimer: The above report is compiled from information available on public platforms. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

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First Published on May 14, 2019 11:56 am
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