Brokerages cheer HDFC Q3 results; Credit Suisse hikes target price to Rs 2,250

The lender reported net profit Rs 5,670.2 crore for the December quarter, a whopping growth of 233.3 percent year-on-year due to one-time gain after stake sale in life insurance business.

  

Shares of HDFC were under pressure on Tuesday, a day after the lender declared its December quarter results. The stock was lower by over 1 percent after trading about 1 percent higher in the opening tick.

The lender reported net profit Rs 5,670.2 crore for the December quarter, a whopping growth of 233.3 percent year-on-year due to one-time gain after stake sale in life insurance business.

The profit during year-ago quarter stood at Rs 1,701.2 crore, it added.

HDFC earned one-time gain of Rs 3,675.3 crore during the quarter, driven by stake sale in HDFC Standard Life Insurance.

Revenue from operations grew by 6.55 percent to Rs 8,667.15 crore in Q3, compared to Rs 8,133.78 crore in corresponding period.

Asset quality remained stable for the quarter as non-performing loans were at 1.15 percent against 1.14 percent in previous quarter.

Brokerages still maintain their positive outlook on the stock, with Credit Suisse hiking the target price to Rs 2,250.

Brokerage: Nomura |Rating: Buy | Target: Rs 2,000

The brokerage house said that core NII performance was supported by stable spreads. Further, core mortgage profit was supported by improving growth trends. Mortgage growth bottomed out, while asset quality was stable. Having said that, it said that recent rerating has limited the near term upside.

Brokerage: Credit Suisse | Rating: Outperform | Target: Raised to Rs 2,250

Credit Suisse said that the third quarter was a steady one, but net interest margins should improve in Q4. Q3FY18: Consolidated profitability remains strong with RoE at 21%. Meanwhile, it also said that NPAs were flat and management is not seeing any stress in affordable housing segment.

Brokerage: CLSA | Rating: Buy | Target: Rs 2,200

The global research firm said that an uptick in lending activity will lead growth & RoE. But, a rise in interest rates is a potential risk to spreads. The risk, it said, is due to rise in rates which can be mitigated by hike in corporate lending rates.

Brokerage: Motilal Oswal | Rating: Buy | Target: Rs 2,260

Motilal Oswal said that the company’s AUM growth continues to surprise; spreads stable QoQ. Further, it said that the company reported a steady quarter, with core PBT up 13 percent year on year. It observed that the firm has continued to surprise positively on the opex front. Retail loan growth impressive, despite intense competition & high base.

At 12:07 hrs Housing Development Finance Corporation was quoting at Rs 1,933.80, down Rs 19.45, or 1.00 percent, on the BSE. It touched an intraday high of Rs 1,973.00 and an intraday low of Rs 1,930.60.

MORE WILL UPDATE SOON!!