HDFC - Contained Credit Cost With Strong Core Buoys Q3 Earnings: ICICI Securities

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ICICI Securities Report

Housing Development Finance Corporation Ltd.’s Q3 FY21 earnings were characterised by -

1. strong core - net interest income growth settling upwards of 25% with net interest margins further expanding 30 basis points to 3.7%;

2. meaningful uptick in individual loan disbursements (26% YoY) suggesting market share gain;

3. collection efficiency nearing pre-Covid-19 level for retail loans (97.6% from 96.3% in September), though lags for non-individual segment (sub-80%); and

4. rise in stage-two pool to 7.1% that will keep bucket-wise movement volatile - though has conservatively included restructuring and Emergency Credit Line Guarantee Scheme pool.

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