Views on HDFC Ltd 3QFY2016 Result: Angel Broking

Views of Mr. Vaibhav Agrawal (VP Research- Banking, Angel Broking) on HDFC Ltd 3QFY2016 Results:

"HDFC Limited 3QFY2016 standalone net profit surged 6.7% YoY to INR 1,521cr. The lower growth in the profit for 3QFY2016 is due to lower non-core income i.e. profit on sale of investments was INR 57cr as against INR 113cr for 3QFY2015 coupled with income from leased properties at INR 1cr as against 17cr for 3QFY2015. Also, provisions jumped to INR 68cr against INR 45cr for 3QFY2015.

Growth in the non-individual loan portfolio saw a spurt recording a net increase of INR 1,987cr for 3QFY2016. This resulted in higher provisioning since the company had to make 1% standard asset provisioning on the increase in the non-individual loan book for the quarter.

Total Advances grew at 13% YoY whereas the growth in the total loan book, after adding back the loans sold in the preceding 12 months is 19%. Gross non-performing loans came at 0.72% of the loan portfolio. Net Interest Margin for the nine months ended December 31, 2015 was 3.85%. Overall, the company reported standalone earnings growth of 6.7% YoY. At the CMP, HDFC's core business (after adjusting INR 489/share towards the value of its subsidiaries) trades at 3.7x FY2017E ABV. We maintain our NEUTRAL view on the stock."

Shares of HOUSING DEVELOPMENT FINANCE CORP.LTD. was last trading in BSE at Rs.1177.6 as compared to the previous close of Rs. 1148.2. The total number of shares traded during the day was 60231 in over 3417 trades.

The stock hit an intraday high of Rs. 1187.6 and intraday low of 1145.6. The net turnover during the day was Rs. 70741786.

Source : Equity Bulls

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