Housing Development Finance Corporation (HDFC) share price gained over 2 percent at open on May 26. The company on May 25 reported a standalone profit of Rs 2,232.5 crore for the quarter ended March 2020, declining 22 percent due to higher provisions related to COVID-19 and high base last year. But it was supported by lower tax cost (down 44.5 percent YoY).
The stock price has fallen 32 percent in the last 3 months and was quoting at Rs 1,548.00, up Rs 31.45, or 2.07 percent at 09:16 hours.
Provisions (expected credit loss) increased significantly to Rs 1,274 crore for the quarter ended March 2020 which included the impact of COVID-19, against Rs 398 crore in March quarter 2019 and Rs 2,995 crore in December quarter.
Profit in March quarter 2019 had included profit on the sale of investments of Rs 312 crore and dividend income of Rs 537 crore. Net interest income, the difference between interest earned and interest expended, grew by 17 percent to Rs 3,780 crore for the quarter ended March 2020.
On an asset under management (AUM) basis, HDFC reported total loan book growth at 12 percent and the growth in individual loan book was 14 percent.
Global research firm Credit Suisse has maintained its outperform call on the stock but has cut target to Rs 1,800 from Rs 2,080 per share, according to a report in CNBC-TV18. It is of the view that Q4 results were relatively muted as growth was moderate and NPAs rose.
However, Credit Suisse sees attractive valuations at 1.4x FY22e Core P/B and has cut FY20 EPS estimates by 2 percent on higher provisions and revaluation loss.
According to Moneycontrol SWOT Analysis powered by Trendlyne, HDFC has zero promoter pledge with low debt. However, Moneycontrol technical rating is very bearish with moving averages and technical indicators being bearish.
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