Please Share:: 
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Healthy growth outlook
Presenting to a full house, Mr. Deepak Parekh (Chairman, HDFC), Mr. Keki
Mistry (Vice Chairman and CEO) and Ms. Renu Karnad (MD) highlighted
that not only are the longer-term potentials of mortgage financing strong
in India, near-to-medium term demand is also holding-up well. Improved
competitive scenario will help to gain market share at profitable termsspreads
are expected to be stable in spite of high rates. Asset quality is
stable and high coverage levels will mean that rise in mandatory
provisioning will have limited impact. The two insurance subsidiaries are
targeting healthy premium growth accounting profit in FY12.
Strong opportunity and improving competitive environment
Management highlighted that home ownership in India is under-penetrated
which coupled with favourable demographics and affordability levels offer
long-term growth opportunities for financiers. Over past few months, while
the metros have seen some moderation in demand due to high interest rates
and property prices, demand from the smaller towns is holding-up well and
will be key growth driver. Competitive intensity in the sector has also eased
with peers focusing on profitability rather than market share gains.
Healthy loan growth and stable spreads
Management expects 18-20% growth in loans during FY12 led by growth in
the smaller towns. HDFC has a widespread branch reach with nearly 300 own
outlets and over 2,000 branches of HDFC Bank which also markets HDFC’s
mortgage loans. HDFC plans to expand its mortgage loan marketing alliance
with other banks. Tight liquidity conditions and risk averseness among banks
is enabling HDFC to make corporate lending at profitable returns. Spreads are
likely to be stable between 2.2-2.3%. In spite of rise in cost of wholesale
funds, HDFC is able to maintain spreads due to (1) balanced ALM and (2) hike
in lending rates; easing competitive environment will further help HDFC.
Stable asset quality and high provisions
Asset quality trends continue to improve and gross NPL ratio was at 83bps
and coverage ratio at 114%. Due to conservative provisioning norms, HDFC
has some surplus provisions of ~Rs3.3bn. Therefore, impact of additional
provisioning as per the new regulatory norms is likely to be nominal.
Managing profitability of subsidiaries
Although, regulatory challenges have caused NBAP margins of life insurance
subsidiary to dip, HDFC Standard Life plans to contain margin decline through
changes in product-mix, improvement in conservation ratio and cut in costs.
Both the life and general insurance subsidiaries are expected to report
accounting profit in FY12.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Healthy growth outlook
Presenting to a full house, Mr. Deepak Parekh (Chairman, HDFC), Mr. Keki
Mistry (Vice Chairman and CEO) and Ms. Renu Karnad (MD) highlighted
that not only are the longer-term potentials of mortgage financing strong
in India, near-to-medium term demand is also holding-up well. Improved
competitive scenario will help to gain market share at profitable termsspreads
are expected to be stable in spite of high rates. Asset quality is
stable and high coverage levels will mean that rise in mandatory
provisioning will have limited impact. The two insurance subsidiaries are
targeting healthy premium growth accounting profit in FY12.
Strong opportunity and improving competitive environment
Management highlighted that home ownership in India is under-penetrated
which coupled with favourable demographics and affordability levels offer
long-term growth opportunities for financiers. Over past few months, while
the metros have seen some moderation in demand due to high interest rates
and property prices, demand from the smaller towns is holding-up well and
will be key growth driver. Competitive intensity in the sector has also eased
with peers focusing on profitability rather than market share gains.
Healthy loan growth and stable spreads
Management expects 18-20% growth in loans during FY12 led by growth in
the smaller towns. HDFC has a widespread branch reach with nearly 300 own
outlets and over 2,000 branches of HDFC Bank which also markets HDFC’s
mortgage loans. HDFC plans to expand its mortgage loan marketing alliance
with other banks. Tight liquidity conditions and risk averseness among banks
is enabling HDFC to make corporate lending at profitable returns. Spreads are
likely to be stable between 2.2-2.3%. In spite of rise in cost of wholesale
funds, HDFC is able to maintain spreads due to (1) balanced ALM and (2) hike
in lending rates; easing competitive environment will further help HDFC.
Stable asset quality and high provisions
Asset quality trends continue to improve and gross NPL ratio was at 83bps
and coverage ratio at 114%. Due to conservative provisioning norms, HDFC
has some surplus provisions of ~Rs3.3bn. Therefore, impact of additional
provisioning as per the new regulatory norms is likely to be nominal.
Managing profitability of subsidiaries
Although, regulatory challenges have caused NBAP margins of life insurance
subsidiary to dip, HDFC Standard Life plans to contain margin decline through
changes in product-mix, improvement in conservation ratio and cut in costs.
Both the life and general insurance subsidiaries are expected to report
accounting profit in FY12.
No comments:
Post a Comment