Gruh Finance
HDFC’s 59.33% subsidiary Gruh Finance reported 11% higher QoQ disbursements for Q2FY14 at Rs. 630 crore, leading to 15% sequential rise in revenue to Rs. 211 crore. Net profit however, was up only 2% sequentially to Rs. 34.35 crore, on account of finance cost rising at a higher pace by 20% (versus 15% topline rise) during the quarter ended 30th September 2013. Also, employee expenses nearly doubled to Rs. 11.4 crore from Rs. 6.7 crore in Q1FY14. Thus, Q2 EPS is Rs. 1.91 while EPS for H1FY14 stands at Rs. 3.80 versus FY13’s Rs. 8.21.
As a prudential measure, company has, as always, carried excess provision in its books, this time Rs. 17 crore higher than what National Housing Board (NHB) norms stipulate. With gross NPAs of Rs. 25 crore or 0.41% of loan assets of Rs. 6,143 crore, company has zero net NPAs. Its capital adequacy is also healthy at 17%. As of 30th September 2013, its networth is Rs. 565 crore, resulting in BVPS of Rs. 31.50.
PBV of 7 times, although lower than the peak of 8x which the company commanded a year back, is still quite a premium in relation to peers and the company’s size and presence.