Shares of mortgage lender HDFC Ltd rose in the early trade on August 1 after company announced its June quarter earnings.
Housing Development Finance Corporation (HDFC) on July 29 reported a net profit of Rs 3,668.82 crore for the June quarter, up 22 percent from the year-ago period.
The average of the estimates of seven brokerages polled by Moneycontrol had expected the net profit to be at Rs 3,902 crore.
The increase in net profit came on the back of a healthy 16.9 percent growth in assets under management that helped net interest income jump by 7.8 percent.
The lender's net interest income came in at Rs 4,447 crore for the April-June quarter, lower than analysts' expectation of Rs 4701 crore.
Catch all the market action on our live blog
Here is what brokerages have to say about stock and the company post June quarter earnings
Macquarie
Macquarie has maintained outperform rating on the stock with a target at Rs 2,960 per share.
It was a good quarter and stake in life insurance to go up. The key negative was a 10 bps QoQ decline in NIM.
The full impact of lending rate hikes will be felt in next quarter, reported CNBC-TV18.
Nomura
Research firm Nomura has kept buy rating on the stock with a target at Rs 2,850 per share.
The company continues to gain market share in core mortgages and remain confident on market share accelerating further, feels Nomura.
The low cyclicality in NIMs & strong asset quality drives comfort further, reported CNBC-TV18.
Motilal Oswal
We expect credit costs to moderate from hereon. Asset quality exhibited strength across both Individual and Non-Individual segments.
We expect margin to recover over the remainder of FY23. With overall provisions at 2.3% of EAD, HDFC has made adequate provisions for any contingencies in asset quality.
We have cut our FY23 EPS estimate by 3% to factor in lower reported margin in 1Q. We expect HDFC to deliver an AUM and PAT CAGR of ~14% each over FY22-24, which will translate into a core RoA/RoE of 2%/14% in FY23/FY4. We reiterate our Buy rating on HDFC with a Target Price of Rs 2,830 (premised on Mar’24E SoTP).
Prabhudas Lilladher
HDFC’s earnings missed estimates led by sequentially lower core metrics. AuM growth was largely in-line at 17% YoY mainly driven by individual loans while NII and margins were lower. Core PPoP was lower by 8%, while higher provisions led to PAT miss by 11.5%.
As per management, ROE expansion would be driven by NII growth, controlled opex and decline in credit costs. Management indicated that home loan demand remains strong while construction finance & LRD could see an uptick.
With respect to merger, few approvals have been received, while dispensation on stake in subsidiaries is yet to be clarified. We retain our multiple at 2.3x based on FY24 P/ABV and Target Price of Rs 2,900 with BUY rating.
At 09:22 hrs Housing Development Finance Corporation was quoting at Rs 2,379.80, up Rs 0.70, or 0.03 percent on the BSE.
Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
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!
