Please Share:: 
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Healthy growth
For 2QFY12, HDFC reported net profit of Rs9.7bn, up 20% YoY. A healthy
growth in loans (19% YoY) and fresh sanctions indicates stable demand
conditions. HDFC is able to win market share due to focus on non-metros
and benign competitive environment. Reported loan growth slowed a bit
due to securitisation of loans during 2Q. Spreads were stable at 2.3% in
spite of rise in wholesale funding costs; asset quality was stable. 2H profit
growth could be weak as 2H11 had Rs3bn of extraordinary income. Over
FY11-14, we expect 19% Cagr in profits supported by 18% Cagr in loans.
Healthy demand and benign competitive environment
Despite rising interest rates and high property prices, HDFC reported 19%YoY
growth in loans as well as healthy growth in fresh approvals and disbursals.
While metros have seen some moderation in demand for mortgage, HDFC’s
stronger foothold in non-metros is helping to offset the pressure. Additionally,
HDFC is benefiting from a benign competitive environment as SBI, a key
competitor, has raised mortgage rates, helping HDFC to win market share. Its
mortgage growth of 18% is higher than banking sector’s 15%.
Securitisation impacts reported loan growth, spreads are stable
During 2QFY12, HDFC reported 19% YoY growth in loans, slightly below the
22% in 1Q as it sold Rs19bn of loans to HDFC Bank during 2Q. We expect
HDFC to deliver 18% loan growth in FY12, net of securitisation of loans. In
spite of rise in cost of wholesale funds, HDFC is able to maintain spreads due
to (1) balanced ALM and (2) benign competitive environment. Change in
funding-mix, rise in share of bonds (mostly below Base Rate) to replace bank
loans also reducing the pressure on funding costs. Margins are at 4.3% and
may expand if the proportion of ‘loans sold to total loans’ rises.
Stable asset quality, but fee growth moderates
Asset quality trends continue to improve and gross NPL ratio was at 82bps
and coverage ratio at 143%. During 2Q, HDFC utilised part of its surplus
provisions towards the new standard asset norms on exiting loans; impact of
norms on incremental lending is marginal. Fee growth moderated to 16% and
operating costs rose by 19% leading to C/I ratio rising to 8.9%.
Maintain BUY
During 1HFY12 profit was up 21% YoY, but reported growth would moderate
in 2H as profit for 2HFY11 was boosted by gain on sale of investments (15%
of 2HFY11 PAT). Over FY11-14, we expect loans to grow at 18% Cagr and
drive 19% Cagr in profits. Maintain BUY with target price of Rs760
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Healthy growth
For 2QFY12, HDFC reported net profit of Rs9.7bn, up 20% YoY. A healthy
growth in loans (19% YoY) and fresh sanctions indicates stable demand
conditions. HDFC is able to win market share due to focus on non-metros
and benign competitive environment. Reported loan growth slowed a bit
due to securitisation of loans during 2Q. Spreads were stable at 2.3% in
spite of rise in wholesale funding costs; asset quality was stable. 2H profit
growth could be weak as 2H11 had Rs3bn of extraordinary income. Over
FY11-14, we expect 19% Cagr in profits supported by 18% Cagr in loans.
Healthy demand and benign competitive environment
Despite rising interest rates and high property prices, HDFC reported 19%YoY
growth in loans as well as healthy growth in fresh approvals and disbursals.
While metros have seen some moderation in demand for mortgage, HDFC’s
stronger foothold in non-metros is helping to offset the pressure. Additionally,
HDFC is benefiting from a benign competitive environment as SBI, a key
competitor, has raised mortgage rates, helping HDFC to win market share. Its
mortgage growth of 18% is higher than banking sector’s 15%.
Securitisation impacts reported loan growth, spreads are stable
During 2QFY12, HDFC reported 19% YoY growth in loans, slightly below the
22% in 1Q as it sold Rs19bn of loans to HDFC Bank during 2Q. We expect
HDFC to deliver 18% loan growth in FY12, net of securitisation of loans. In
spite of rise in cost of wholesale funds, HDFC is able to maintain spreads due
to (1) balanced ALM and (2) benign competitive environment. Change in
funding-mix, rise in share of bonds (mostly below Base Rate) to replace bank
loans also reducing the pressure on funding costs. Margins are at 4.3% and
may expand if the proportion of ‘loans sold to total loans’ rises.
Stable asset quality, but fee growth moderates
Asset quality trends continue to improve and gross NPL ratio was at 82bps
and coverage ratio at 143%. During 2Q, HDFC utilised part of its surplus
provisions towards the new standard asset norms on exiting loans; impact of
norms on incremental lending is marginal. Fee growth moderated to 16% and
operating costs rose by 19% leading to C/I ratio rising to 8.9%.
Maintain BUY
During 1HFY12 profit was up 21% YoY, but reported growth would moderate
in 2H as profit for 2HFY11 was boosted by gain on sale of investments (15%
of 2HFY11 PAT). Over FY11-14, we expect loans to grow at 18% Cagr and
drive 19% Cagr in profits. Maintain BUY with target price of Rs760
No comments:
Post a Comment