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Motilal Oswal Report
Housing Development Finance Corporation Ltd. reported a profit after tax of Rs 44.5 billion in Q2 FY23 (5% beat), up 18% YoY, primarily driven by a lower effective tax rate of ~18% (because of higher dividend income).
Core pre-provision operating profit grew 15% YoY to Rs 43.8 billion.
Margin was stable QoQ at 3.4% in H1 FY23. Credit costs fell by ~4 basis points QoQ to ~32 bps, aided by a decline of ~20 bps in gross stage-III and resolutions in the non Individual segment.
HDFC's disbursements in the Individual segment grew 36% YoY to Rs 440 billion. individual/total assets under management rose 20%/16% YoY, with individual loans comprising ~81% of AUM.
The management said it has a healthy pipeline in construction finance and lease rental discounting, and expects growth in the non Individual segment to accelerate in subsequent quarters.
With the merger announced, taking a view in isolation is difficult. However, we feel that HDFC continues to have a strong ‘right to win' in its standalone mortgage business.
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