Growth outlook Sanguine: HDFC maintained its growth guidance of ~20% with
ex-Mumbai portfolio seeing robust growth in individual segments. Rate
differentials with SBI is very limited at the moment to impact volumes for HDFC
ltd. Management has not seen any increase in pre-payment rates due to the
abolition of pre-payment charges and believes operational hassles/charges in
switching to a new financier will prevent their dual rate customers to switch
over to SBI.
Margins stable: Margins continue to remain stable for HDFC and lower
wholesale rates are further aiding margins as pricing environment is getting
competitive.
Re‐iterated safe nature of non‐individual loan portfolio: HDFC re-emphasised
that non-individual portfolio risk profile to be low with only 13%
builder/construction finance and rest ~20% constituted by rental discounting
and corporate construction loans. Even in the builder portfolio, HDFC
emphasised they lend only at SPV level for construction with significant LTV
comfort.
Accounting: Company will declare IFRS related accounts from Sep-12 and this
should help address investor concerns on some aggressive accounting followed
by HDFC Ltd. Also, HDFC in its recent presentation have clarified on various
consolidated accounts as well adjusting for the interest on ZCBs.
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