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Motilal Oswal Report
Housing Development Finance Corporation Ltd. Q4 FY23 reported profit after tax grew 20% YoY to Rs 44.3 billion (13% beat), aided by net interest margin expansion and higher assignment income. Core pre-provision operating profit grew 16% YoY to Rs 53.4 billion.
Net interest margin expanded sequentially by ~10 bps with FY23 NIM at 3.6% (versus 3.5% as on nine months FY23). Credit costs increased ~4 bps QoQ to ~29 bps.
Disbursements in the Individual segment were slightly below Rs 500 billion in Q4 FY23. Individual/total AUM rose 17%/11% YoY, with Individual loans comprising ~83% of AUM.
The management shared that it has not witnessed any perceptible change in demand for mortgages, despite the high interest rates and that a large proportion of customers have seen only their tenor increase rather than any EMI increase.
HDFC achieved its highest ever monthly disbursements in March 2023 and expects this positive momentum to continue throughout FY24. Commentary on the existing mortgage demand has been divergent across the different lenders in the mortgage ecosystem.
HDFC continues to have a strong ‘right to win' in its standalone mortgage business.
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