Axis Direct's research report on HDFC
HDFC’s Q2 PAT at Rs 21 bn (up 15% YoY) was in line with estimate. AUM growth was strong at 18% YoY driven by ~24% YoY growth in non-individual book (~30% of portfolio) while NIM declined by 10 bps QoQ to 3.9%. However, spreads remained stable at 2.3% and guidance maintained in range of 2.2-2.35%. Value unlocking from life insurance and AMC business is on the way and will be value accretive.
Outlook
Asset quality deteriorated slightly with overall GNPA ratio up 2 bps QoQ at 1.14%. GNPAs in individual loans remained stable at 0.65% but for non-individual portfolio deteriorated further to 2.18%. The management intends to create a provision buffer in Q3 from the profits realized on listing of its life insurance subsidiary. Retain BUY with TP of Rs 1,980.
For all recommendations report, click here
Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions. HDFC-08112017
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
