HDFC Stock Retained On 'Buy' By ICICI Securities, HDFC's NII Increased 18.4% YoY

ICICI Securities has retrained the buy rating on HDFC, with a target price of Rs. 3350 per share. HDFC's share price has increased more than 2x in the last 5 years. The brokerage firm has mentioned that the market leadership, funding advantage, and adequate capital have led them to remain positive on the company's fundamentals. ICICI Securities has valued HDFC Ltd at ~2.5x FY23E core ABV.

Q2FY22 financial report of HDFC

In the latest Q2FY22 financial report, HDFC, the private lender has reported a steady operational show. Their loan growth stood at 9.6% YoY, and Individual loans were up 15.4% YoY. Significantly, the lender's Net Interest Income (NII) increased 18.4% YoY, while NIMs went down 10 bps QoQ, dividends boost other income. On the other hand, the company's GNPA went south 24 bps QoQ to 2.0%, which is a positive note for HDFC.

Key triggers for future price-performance

According to ICICI Securities, pick up in business growth with a turnaround in real estate market is positive, funding advantage and adequate capital to aid growth and earnings, healthy provision buffer and improvement in the collection to aid asset quality, and improved performance from subsidiaries to add value - will be the key triggers for future price performance.

About HDFC's company stock

HDFC is the largest NBFC engaged in the housing finance business with a consistently good performance in terms of both business growth, and asset quality. Individual loans contribute ~78% of AUM of the company.

Rating rational of ICICI Securities is mentioned below

Buy: >15%
Hold: -5% to 15%;
Reduce: -15% to -5%
Sell:

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Disclaimer:

The above stock was picked from the brokerage report of ICICI Direct. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution. Greynium Information Technologies, the author, and the brokerage house are not liable for any losses caused as a result of decisions based on the article.