Views on HDFC Ltd. 4QFY2016 Results: Angel Broking

Views of Mr. Siddharth Purohit (Sr. Equity Research Analyst- Banking, Angel Broking) on HDFC Ltd. 4QFY2016 Results:

Extraordinary Income Drives HDFC's 4QFY16 PAT:

"HDFC Limited 4QFY2016 standalone net profit raised 46.0% YoY to INR 2,720cr. The higher growth in the profit for 4QFY2016 was due to higher non-core income i.e. profit on sale of investments was INR 1,520cr, as against INR 225cr for 4QFY2015. Taking advantage of the extraordinary income the company has made an exceptional provision to the tune of INR 450cr to further strengthen its balance sheet. Provisions from regular operations went up to INR 95cr vs. INR 68cr in 3QFY16, however we don't see much of concern due to this as overall asset quality of the company continues to be strong.

Total Advances grew at 14% YoY whereas the growth in the total loan book, after adding back the loans sold in the preceding 12 months is 24%. Gross non-performing loans came at 0.70% of the loan portfolio. Net Interest Margin for the year ended March 31, 2016 was 3.9%. At the CMP, HDFC's core business (after adjusting INR 487 per share towards the value of its subsidiaries) trades at 3.3x FY2017E ABV. We maintain our NEUTRAL view on the stock."

Shares of HOUSING DEVELOPMENT FINANCE CORP.LTD. was last trading in BSE at Rs.1092.75 as compared to the previous close of Rs. 1088.8. The total number of shares traded during the day was 206820 in over 7752 trades.

The stock hit an intraday high of Rs. 1097.95 and intraday low of 1079.05. The net turnover during the day was Rs. 225321912.

Source : Equity Bulls

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