Mortgage lender HDFC is all set to report a single digit rise in net profit on a 5-15 per cent jump in net interest income (NII). Net interest margin (NIM) is likely to be stable sequentially. Outlook on margins, home loan demand, and asset quality in the non-individual segment would be key monitorables.
Unlike the typical March quarter, said Motilal Oswal Securities, the momentum for housing finance companies (HFCs) may relatively muted this quarter. The transitory impact on margins, owing to the lag in transmitting higher borrowing costs to customers, might have continued in the March quarter, the brokerage said.
Motilal Oswal Securities expects asset quality to improve for HDFC with a sequential decline in credit costs. It sees profit after tax for the quarter (excluding exceptional items) at Rs 3,839 crore, up 10 per cent YoY. Including such items, profit after tax is seen at Rs 3,920 crore, up 6 per cent. NII is seen rising 10.4 per cent YoY to Rs 5,079.50 crore, Motilal Oswal Securities said.
Nuvama Institutional Equities pegs the profit figure at Rs 3,940 crore, up 6.4 per cent. NII is seen rising 7 per cent while credit cost to total loans perecntage is seen at 0.18 per cent.
The stock is up 3.6 per cent year-to-date. It gained 21 per cent in the last one year.
Kotak Institutional Equities sees profit rising 1 per cent to Rs 3,722 crore. IT sees NII growing 5 per cent YoY to Rs 4,829 crore. NIM is seen at 3.1 per cent, down 10 basis points over 3.1 per cent in the December quarter. Core income is seen rising 5 basis points QoQ to 2.6 per cent.
“We expect cost-to-AAUM ratio of 35 bps (35 bps in 2QFY23) and pen down credit cost of 10 bps for the quarter. HDFC reported a loss of Rs 270 crore on FV changes in investments (gain of Rs 270 crore in 4QFY22) and dividend income of Rs 200 crore (Rs 130 crore in 4QFY22),” Kotak noted.
ICICI Securities estimated profit for HDFC at Rs 3,868.30 crore. This brokerage sees 15 per cent YoY rise in net interest income (NII) at Rs 5,024.10 crore.
ICICI Securities said it sees loans growing 15 per cent YoY to Rs 6,51,060 crore, led by healthy demand for home loans.
“NIMs to remain largely steady despite competitive intensity. Provisions to decline marginally YoY at Rs 391 crore leading to standalone profit growth of 6.3 per cent YoY (4.8 per cent growth QoQ) to Rs 3,868 crore. Subsidiaries are expected to report a steady performance,” it said.
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Source: businesstoday.in