ICICIdirect.com's report on Housing Development Finance Corporation (HDFC)
HDFC’s standalone earnings at Rs 1862 crore, up 8% YoY, were in line. NII growth stood at 10% YoY to Rs 2271 crore. Other income traction was maintained strong at 38.8% YoY to Rs 603 crore led by treasury gains, which included part of a stake sale in HDFC Life to the Azim Premji Trust in Q3FY15. Full year PAT was Rs 5990 crore, up 10% YoY
Advances growth excluding loans sold was in-line at 15.8% YoY to Rs 228181 crore. Including loans sold, growth remained strong at 23%. During Q4FY15, as usual, loan growth remained tilted towards individual loans. However, a pick-up in traction of developer loans was seen at 12% YoY vs. ~10% YoY clocked in last several quarters
Asset quality was steady with GNPA ratio at 0.67% (down 2 bps QoQ) with both segments witnessing QoQ improvement. NIMs at 4%
"HDFC has commanded premium valuations over the years due to its consistent track record in earnings and business growth. Return ratios have remained healthy across economic cycles with RoE >20% and RoA >2.5%. We expect this to be maintained in FY15-17E. The consolidated PAT as on FY15 stood at Rs 8763 crore with subsidiaries contributing 32%. Even consolidated RoEs have been healthy at ~21%. We largely maintain our earnings estimate. However, we raise our SOTP based target price to Rs 1410 (Rs 1350 earlier) and have a BUY recommendation on the stock", says ICICIdirect.com research report.
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