Buy Housing Development Finance Corporation: target of Rs 2400: Sharekhan

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26 Aug, 2025 12:21

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Sharekhan's research repor on Housing Development Finance Corporation

Q2 FY2021 results were strong, with operational results beating expectations; asset quality improved sequentially and margins too rose. Overall collection efficiency for individual loans stood at 96.3% in September (first month after RBI moratorium ended) which is encouraging. Asset quality improved with overall NPA ratio falling 6 bps q-o-q to 1.81%; company is better capitalised (Tier-I at 19.5%; up from 16.2% in Q1 FY2021) which adds to balance sheet strength.

Outlook

HDFC is currently available at reasonable valuations of 3.7x / 3.4x its FY2022E / FY2023E ABV; We maintain our Buy rating on the stock with a revised SOTP-based price target (PT) of Rs. 2,400.

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