Buy This Finance Stock For +19% Return, Sharp Recovery, And Positive Outlook

Target Price

The Current Market Price (CMP) of HDFC is Rs. 2809. The brokerage firm, Geojit has estimated a Target Price for the stock at Rs. 3355. Hence the stock is expected to give a +30% return, in a Target Period of 1 year.

Company performance

HDFC's Net Interest Income (NII) grew 14.1% YoY to Rs. 4,110 crore; NIM improved to 3.6% (+40bps YoY). PAT up 31.7% YoY as a spread on loans improved this quarter. Cost to income ratio stood at 8.2%, vs 8.4% in the last quarter. Strong revival in collections and disbursement were seen in the first half of the year. The company's loan book was at Rs. 507,645 crore (+9.6% YoY) as loan book on AUM basis grew by 10.6% YoY to Rs. 579,339 crore as the individual loan book grows 16% YoY.

 

Comments by Geojit

Geojit said, "The outlook over long-term remains positive on the back of well-diversified loan portfolio and adequate liquidity on hand." The brokerage firm added, "We expect the margins to remain stable as not much changes in the base rate are expected in the near future. Maintaining these spread levels will be the focus for the company. We remain positive on the stock and reiterate our BUY rating with a revised target price of Rs. 3,355 using SOTP Valuation."

About the company

Housing Development Finance Corporation Limited provides housing finance to individuals and corporates in India. HDFC also provides construction finance to real estate developers and provides lease financing.

Disclaimer:

The above stock was picked from the brokerage report of Geojit. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution. Greynium Information Technologies, the author, and the brokerage house are not liable for any losses caused as a result of decisions based on the article.