HDFC Ltd

The housing loan major, HDFC, beat all estimates for Q4 and FY13. It posted a 17% (YoY) hike in consolidated net profit at Rs.1555 crore. NII was up 13% at Rs.1900 crore. For FY13, consolidated net profit rose 22% at Rs.6,640 crore. This exuberant performance was on the back of growth in loans. HDFC expanded its loan book by nearly 21% (YoY) at  Rs.1.70 lakh crore, surpassing the industry average for credit growth at around 14%. The growth in the individual loan book, after adding back loans sold was 31% and non-individual loans grew by 13%. The growth in the total loan book after adding back loans sold is 24%. This clearly shows that it was individual loans which boosted the institutions earnings and it also shows that when there is a need, people will buy homes, irrespective of the interest rate or the realty rates.

NIM was at 4.21% v/s 4.4% a year ago. net interest margin for the year ending March 31 stood at 4.21 percent, a marginal fall compared with 4.4 percent a year ago. In terms of asset quality it is very well placed  and NPAs remained stable with gross NPA for the quarter at 70 bps. Provisioning is in excess of RBI mandate. Undoubtedly, HDFC remains a market leader and quarter after quarter, despite difficult times, it has always declared a consistently improving performance. The market already knows this fact which is why fancy for the stock is so high, leaving little room for any major upward rally. It is one the stocks which is not for trading but for a long term secure investment.