HDFC Q2 Review- Growth Gaining Traction; Results Beat On Lower Credit Cost, Stable Core: ICICI Securities
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ICICI Securities Report
Housing Development Finance Corporation Ltd.’s Q2 FY22 credit cost was capped at less than 40 basis points, beating our earnings expectations.
Stress pool moderated a tad with stage-III assets coming off 10 bps QoQ to 2.5% and stage-II moderated to 6.2% (versus 6.6%).
Individual segment stage-III assets contracted 30 bps QoQ to 1.3%, and for non-individual segment stage-III increased by 40 bps to 6.2%.
On stress pool (stage-II/III) of 23.2%/3.9% in non-individual/ individual segments, HDFC is carrying provisions of 7.83%/0.82%.
Individual loan growth momentum gained traction to 16% YoY (up 4% QoQ) suggesting improving market positioning.
Non-individual assets under management growth is still under pressure, but pipeline suggests build-up going forward.
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