Housing Development Finance Corporation (HDFC) share price edged higher in the morning session on February 3, a day after the company declared its December quarter earnings.
The country's largest housing finance on February 2 reported a healthy 13 percent increase in its net profit increase in net profit for the December quarter on the back of strong loan disbursals and stable yield spreads.
Housing Development Finance Corporation reported a net profit of Rs 3,690.80 crore for the December quarter, up from Rs 3,260.69 crore in the same quarter of the previous year.
The lender's net interest income rose by 13 percent to Rs 4,840 crore for the December quarter from Rs 4,284 crore in the corresponding quarter of FY22. Its total interest income rose to Rs 14,457 crore from Rs 11,055 crore in the year-ago period. Total revenue from operations was Rs 15,230.12 crore, up from Rs 11,783.60 crore in the year-ago period.
Individual loan disbursements grew by 23 percent year on year. Disbursements slowed in October and November but picked up in December, HDFC vice chairman Keki Mistry said.
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The stock was quoting at Rs 2,645.75, up Rs 32.95, or 1.26 percent, on BSE.
According to domestic research and broking firm Motilal Oswal, HDFC's core Pre-Provision Operating Profit (PPOP) grew 11 percent YoY to Rs 45.4 billion.
"Margin expanded sequentially with Q9 FY23 net interest margin (NIM) at 3.5 percent (v/s 3.4 percent in H1 FY23). Credit costs declined ~7bp QoQ to ~25bp, aided by minor improvement in asset quality. Disbursements in the Individual segment were slightly above Rs 400 billion in Q3 FY23. Individual/total asset under management (AUM) rose 19 percent/13 percent YoY, respectively, with Individual loans comprising ~83 percent of AUM," it said.
HDFC continues to have a strong ‘right to win’ in its standalone mortgage business. "We maintain our buy rating on the stock, with a target of Rs 3,050 (premised on Sep’24E SoTP), an upside of 15 percent from the current market price," the brokerage firm said.
The research said HDFC's quarter is in line and NIM was flat. The brokerage added that individual loan growth was robust, shedding non-compliant loans. Core PPoP was largely in-line and asset quality improved. RBI dispensation and deposit mobilisation would be the key monitorable, it added.
With agency inputs
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