Sharekhan's research report on Housing Development Finance Corporation
HDFC’s reported PAT at Rs. 4,454 crore, which was above street expectations and our estimates (3%), rising by 18% y-o-y/ 21% q-o-q mainly due to higher dividend income and contained credit cost. AUM growth was healthy at 16% y-o-y/ 3% q-o-q, with individual loans growing robustly by 20% YoY & Non-individual book grew mutedly by 1% YoY. NII grew by 13% y-o-y/ 4% q-o-q. NIMs (calculated as % of avg. AUMs) stood at 2.86% flat QoQ. Operating profits rose by 15%y-o-y / 15% q-o-q on the back of higher non-core income in the form of dividend from subsidiaries. Credit costs (% of avg AUM) stood at 28 bps vs 31bps QoQ. Combined gross Stage 2&3 assets fell by 62 bps QoQ tp 5.84% vs 6.47% in Q1FY23. GNPL in individual loans stood at 0.91% vs 0.98% in the last quarter, and in non-individual book, GNPL stood at 3.99% vs 4.44% in the last quarter.
Outlook
We maintain a Buy on the stock with an unchanged SOTP-based PT of Rs. 3,025. At CMP, HDFC trades at 1.5x and 1.4x of its FY23E/FY24E Core BV.
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