HDFC Q3FY13, PAT Up 27.5%
DSIJ Intelligence / 22 Jan 2013
HDFC has performed in line with what was expected of it in the December quarter of 2012. On a consolidated basis, the insurance business has begun yielding good profits and is now contributing a sizeable chunk to the overall profitability of the company. Enter this counter in a staggered manner, if you are yet to own this blue chip stock.
HDFC, India’s largest housing finance company reported a performance for the December quarter of 2012 which was in line with what was expected. On a consolidated basis, its topline increased by 19 per cent to Rs 5538 core while the bottomline increased by 27.5 per cent to Rs 1705 crore on a YoY basis.
| Particulars (Rs / Cr) | Dec-12 | Dec-11 | % change |
|---|---|---|---|
| Income from operations | 5538 | 4647 | 19.17 |
| Total Income | 10128 | 6379 | 58.77 |
| Interest Expense | 6327 | 3022 | 109.36 |
| Staff Expense | 135 | 111 | 21.62 |
| Total Expense | 8315 | 4963 | 67.54 |
| Profit Before Tax | 1823 | 1442 | 26.42 |
| Tax | 469 | 391 | 19.95 |
| Profit After Tax | 1705 | 1337 | 27.52 |
The loan book of HDFC grew by 22 per cent to Rs 160941 crore on a YoY basis as at the end of the December quarter (as on December 31st, 2012). Its Capital Adequacy Ratio (CAR) stood at 17.5 per cent with Tier 1 CAR at 14.9 per cent as against the minimum requirement of 15 and 12 per cent respectively. HDFC faced some pressure on the Net Interest Margin (NIM) front, it having decreased by 10 basis points 4.1 per cent on a sequential basis.
Its asset quality continues to remain healthy with Gross NPAs decreasing by 7 basis points to 0.75 per cent on a YoY basis. This is the 32nd consecutive quarter end at which the percentage of non-performing loans has been lower than the corresponding quarter.
For the December quarter of 2012, the housing segment (which accounted for 52 per cent of the total revenue) grew by 53 per cent while profit from the same saw a somewhat subdued growth of 17 per cent to Rs 1591 crore. Revenue from Insurance grew by 40 per cent to Rs 1591 crore while Profit from this segment stood at Rs 126 crore against a meager Rs 10 crore during the same period last year. Profit from the Insurance segment helped the overall bottom line growth of the company.
On a consolidated basis for the first nine months of FY13, total income grew by 54 per cent to Rs 27846 crore while Profit after tax grew by 24 per cent to Rs 4556 crore on a YoY basis. Diluted Earnings Per share for 9MFY13 grew by 20 per cent to Rs 29.76 per share. The stock closed a per cent lower at Rs 814.5 per share. On the valuation front, HDFC is available at TTM PE multiple of 19.56x and is available at a Price to Book Value of around 5x which we believe is fairly good. If you are yet to own this stock, we advice a staggered entry into the counter, so that you build wealth steadily over the longer term.
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