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HDFC’s net profit at Rs9.7bn was up 20% yoy and 15%
qoq. Operating performance remains strong with healthy
loan growth, stable spreads and sound asset quality.
While core was in line, higher-than-expected trading gains
explained why actual net profit was above our estimate.
Strong loan growth (25% yoy before sell-downs), strong
disbursement (19% yoy), sequential improvement to
calculated spreads and asset quality were key highlights
To meet new NHB guidelines, HDFC has drawn Rs2.6bn
net of tax from Sec 29 reserves. This impact has not come
through the P/L account.
We maintain Underperform on rich valuations.
Strong loan growth. Loans grew 20% yoy and 3% qoq after
sell-downs. Before sell-downs to HDFC Bank, loans grew 25%
yoy and 2% qoq. Disbursements grew 19% yoy and 22% qoq.
The strong sequential pick up in disbursements in 2Q is
seasonal and happens every year.
Calculated spread moves up sequentially in 2Q. Spread
calculated from the balance sheet averages has moved up to
2.25% in 2Q FY12 from a low of 1.7% in 1Q FY12 and is now in
line with the FY11 spread of 2.3%. The sequential recovery in
spreads is largely due to higher lending rates and partly due to
some easing in incremental cost of funds during the quarter.
Stable asset quality. Asset quality remains sound with gross
NPLs at a low 0.82%. HDFC has met new NHB provisioning
norms by drawing down on Sec 29 reserves. The draw down
net of deferred tax is Rs2.6bn.
Trading gains, dividends and cost to income. HDFC
reported higher-than-expected trading gains of Rs870m in 2Q
FY12 against Rs163m in 1Q FY12 and Rs590m in 2Q FY11.
Yoy growth in dividend income was also strong due to part
payment of HDFC Bank dividend. Cost to income ratio
remained stable yoy at 8.4%.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
HDFC’s net profit at Rs9.7bn was up 20% yoy and 15%
qoq. Operating performance remains strong with healthy
loan growth, stable spreads and sound asset quality.
While core was in line, higher-than-expected trading gains
explained why actual net profit was above our estimate.
Strong loan growth (25% yoy before sell-downs), strong
disbursement (19% yoy), sequential improvement to
calculated spreads and asset quality were key highlights
To meet new NHB guidelines, HDFC has drawn Rs2.6bn
net of tax from Sec 29 reserves. This impact has not come
through the P/L account.
We maintain Underperform on rich valuations.
Strong loan growth. Loans grew 20% yoy and 3% qoq after
sell-downs. Before sell-downs to HDFC Bank, loans grew 25%
yoy and 2% qoq. Disbursements grew 19% yoy and 22% qoq.
The strong sequential pick up in disbursements in 2Q is
seasonal and happens every year.
Calculated spread moves up sequentially in 2Q. Spread
calculated from the balance sheet averages has moved up to
2.25% in 2Q FY12 from a low of 1.7% in 1Q FY12 and is now in
line with the FY11 spread of 2.3%. The sequential recovery in
spreads is largely due to higher lending rates and partly due to
some easing in incremental cost of funds during the quarter.
Stable asset quality. Asset quality remains sound with gross
NPLs at a low 0.82%. HDFC has met new NHB provisioning
norms by drawing down on Sec 29 reserves. The draw down
net of deferred tax is Rs2.6bn.
Trading gains, dividends and cost to income. HDFC
reported higher-than-expected trading gains of Rs870m in 2Q
FY12 against Rs163m in 1Q FY12 and Rs590m in 2Q FY11.
Yoy growth in dividend income was also strong due to part
payment of HDFC Bank dividend. Cost to income ratio
remained stable yoy at 8.4%.
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