1
Please refer to important disclosures at the end of this report
1
1
HDFC Ltd is specialised housing finance company (HFC) and also the largest
with an outstanding loan book of `312978cr as on Q1FY18 of which individual
loans accounted for ~69% while the corporate proportion has declined to ~30%
from highs of 36% in FY12 led by strong individual home loan growth. In the
past four years, the major driver has been the individual loan book, which grew
at 19% CAGR vs. 11% seen in the corporate book. This is owing to a strained
economic environment leading to a weak investment cycle. It has maintained its
leading position despite a challenging macro environment. This is owing to its
unique strengths such as a strong franchise, brand pedigree, in-house model,
large network and a dedicated business. Factoring the RERA benefit, we believe
the corporate loans segment may see an uptick. HDFC has maintain a healthy
track record of sustaining spreads & NIMs above 2% and 3.5%, respectively,
across volatile interest rate cycles. Further, it earns ~1.2% spread on loans sold
to banks. HDFC has one of the best asset quality parameters in the industry with
Nil NNPA. Its GNPA as on Q1FY18 was 1.12% though marginally surged but
adequately provided. Capital Adequacy Ratio is also maintain >14.5% over last
few years.Provision coverage ratio maintained at 100%. Credit cost at 0.08% is
lowest in the industry.Return ratios have remained healthy across economic
cycles with RoE >20% & RoA ~2.2-2.3% and has been maintaining a healthy
dividend payout of 26.35%.. Hence Buy.
BUY
CMP `1755
1.1
Reuters Code
HDFC.NS
HDFC:IN
2
BSE Sensex
32,182
Nifty
10,096
Face Value (`)
Housing Finance
Market Cap (` cr)
280,000
52 Week High / Low
1802.25/1185
Avg. Daily Volume
90,929
Vaibhav Agrawal
022 3935 7800 Ext: 6808
[email protected]gelbroking.com
HDFC Ltd
Others | Housing Finance
Oct 13, 2017
2
HDFC Ltd |Housing Finance
Oct 13, 2017
2
Research Team Tel: 022 - 39357800 E-mail: [email protected] Website: www.angelbroking.com
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Disclosure of Interest Statement HDFC
1. Financial interest of research analyst or Angel or his Associate or his relative No
2. Ownership of 1% or more of the stock by research analyst or Angel or associates or relatives No
3. Served as an officer, director or employee of the company covered under Research No
4. Broking relationship with company covered under Research No
Ratings (Based on expected returns Buy (> 15%) Accumulate (5% to 15%) Neutral (-5 to 5%)
over 12 months investment period): Reduce (-5% to -15%) Sell (< -15)