*Housing Development Finance Corporation** - Sharekhan *Recommendation: Hold Price target: Rs910 Current market price: Rs886
*Price target revised to Rs910* Result highlights - Housing Development Finance Corporation (HDFC)’s Q4FY2013 results were in line with our estimate as its net profit grew by 17.3% year on year (YoY; up 36.4% sequentially) to Rs1,555 crore driven by a healthy growth in the operating profit (up 14.6% YoY). - The net interest income (NII) growth was largely in line with our estimate as it increased by 11.9% YoY (up 26.8% quarter on quarter [QoQ]) to Rs1,950.8 crore. A strong growth in the advances and stable spreads contributed to the NII growth. - Overall, the loan book expanded strongly by 20.7% YoY (up 24% YoY, including the loans sold). The individual loans were up 25.4% YoY (up 31% YoY, including the loans sold), thereby leading to an increase in the proportion of individual loans to ~66.0%. - The loan approvals saw a growth of 14.5% YoY whereas the disbursements grew by 15.9% during the quarter. The borrowings increased by 32.1% YoY. - The asset quality improved as the gross non-performing asset (GNPA) was at 0.7% vs 0.75% in Q3FY2012. The outstanding provisions including the standard asset provisions on the balance sheet were higher by Rs286 crore as against the regulatory requirement of Rs1,506 crore. *Valuations: *HDFC’s strategy of reaching out to newer geographies is bearing fruits as the loan book continues to expand at a healthy rate despite competition. The company’s strong distribution network (both metro and non-metro regions) and competitive pricing of products are likely to contribute to a strong growth. We have marginally tweaked the estimates for FY2014 and FY2015, and revised the sum-of-the-parts (SOTP) based price target to Rs910. However, we maintain Hold rating on the stock due to premium valuation. -- CA. Rajesh Desai -- You received this message because you are subscribed to the Google Groups ""GLOBAL SPECULATORS"" group. To unsubscribe from this group and stop receiving emails from it, send an email to [email protected]. To post to this group, send email to [email protected]. Visit this group at http://groups.google.com/group/globalspeculators?hl=en. For more options, visit https://groups.google.com/groups/opt_out.
