HDFC Ltd - Q2FY21 First Cut - ICICI Securities

(CMP: Rs. 2043, MCap: Rs. 366820 crore)

HDFC Ltd reported better than estimated results led by improvement in asset quality and steady AUM growth. However, PAT growth was capped due to muted other income.

Q2FY21 Earnings Summary

- Asset under moratorium (by value) stood at Rs. 7977 crore as on September 2020 (~1.48% of AUM). Asset quality improved with GNPA ratio down ~ 6 bps QoQ to 1.81% (GNPA - Rs. 8511 crore vs ~Rs. 8631 crore QoQ). GNPA in the non-individual portfolio deteriorated to 4.19% vs 4.1% in June 2020. Individual portfolio GNPA came in a tad lower by ~8 bps QoQ to 0.84%. Excluding asset classification norms, overall GNPA ratio would be 1.83% with individual/corporate non-performing loans at 0.88% and 4.19% respectively

- Net interest income growth was healthy at Rs. 3674 crore, up 21% YoY on account of stable margins. Reported NIM came at 3.2%, down 10 bps YoY. Overall opex came in at Rs. 366 crore, down 3.5% YoY. Lower other income growth led PPP to come in at Rs. 3968 crore, down 25% YoY

- AUM stood at Rs. 540270 crore, up 10% YoY on the back of healthy growth in non-individual portfolio at 13%. Individual loan growth decelerated to 9% YoY and accounted for ~75% of the overall portfolio. Average size of individual loans stood at Rs. 26.7 lakhs vs Rs. 27 lakhs in in September 2019. Growth in individual loan book, after adding back loans sold in the preceding 12 months remained healthy at 15% YoY

- Provisioning for the quarter stood at Rs. 436 crore, which was Rs. 754 crore in Q2FY20 and Rs. 1199 crore in Q1FY21. Covid provisioning as on September 2020 stood at Rs. 1200 crore (~22 bps of advances). Provisions as on 30th June 2020 stood at Rs. 12304 crore (~2.6% of the EAD). Lower provisioning was offset by muted other income growth which led PAT to decline by 27.6% YoY to Rs. 2870 crore

- During the quarter ended September 2020, HDFC Ltd has assigned loans amounting to Rs. 3026 crore to HDFC Bank

We would be coming out with a detailed report soon.

Shares of HOUSING DEVELOPMENT FINANCE CORP.LTD. was last trading in BSE at Rs.2042.65 as compared to the previous close of Rs. 1922.75. The total number of shares traded during the day was 223532 in over 14274 trades.

The stock hit an intraday high of Rs. 2065 and intraday low of 1921. The net turnover during the day was Rs. 444150219.

Source : Equity Bulls

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