HDFC Ltd

The institution posted a good set of numbers for Q3FY13, with consolidated net profit rising 28% at Rs.1,706crore on a YoY, on a 59% rise in total income at Rs.10.129 crore. These numbers include 21 subsidiaries, including insurance, Gruh Finance, and asset management, and six associates, including HDFC Bank.  Subsidiaries account for 24% of company’s net profit for H1FY13, main contributor being HDFC Bank. Total loan book rose 21.7% at Rs.1,60,941crore. Gross NPA was down from 0.82% to 0.75% (YoY). For 9MFy13, individual loans (retail home loans) spurted 85% while the non-individual loans rose only 15%. The non-individual portfolio (loans given to builders and corporates) bore the majority share of bad loans with 0.91% as against 0.62% from the home loans.NIM was at 4.10% v/s 4.20% in Q2Fy13. Total capital adequacy ratio stood at 17.5% with Tier I at 14.9%, thereby showing that there is sufficient capital available for growth without any dilution.

As of 31st December 2012, about 1,100 foreign institutional investors held 73.17% equity stake in the company, which has no identifiable promoter. 400 odd domestic institutions hold 13.78% stake in the company, leaving a moderate float of 13.05% in the hands of Indian public. In FY13 so far, company has paid advance tax of Rs. 1,420 crore (Rs. 300 crore in first instalment and Rs. 560 crore each via second and third instalments) as against Rs. 1,210 crore paid cumulatively for first three instalments in FY12. Thus, this 17% higher tax payment indicates the healthy growth likely in the current fiscal.  For FY13, company is likely to report EPS of Rs. 43, which leads to BVPS of Rs. 222 as of 31st March 2013. A long term stock, it has been recommended in our Stock Recommendation section at Rs.810 on 18th Jan’12, for a price target of Rs.1000 in one year.