Share price of Housing Development Finance Corporation (HDFC) was trading lower today after the mortgage lender reported a 4.7 percent year-on-year (YoY) decline in standalone net profit in Q1. HDFC share price fell 2.81% to Rs 1,760 against previous close of Rs 1,811 on BSE.
The stock has lost 2.63% in one week and 25.72% since the beginning of this year. In one year, the share has fallen 15.51% . The stock has lost 5.56% in last 3 days. HDFC share price is trading higher than 50 day and 100 day moving averages but lower than 5 day, 20 day and 200 day moving averages.
The large cap share has declined 15.51% in one year. Over 2.25 lakh shares changed hands amounting to turnover of Rs 40.24 crore on BSE.
Market cap of the mortgage lender fell to Rs 3.10 lakh crore. At 12:55 pm, the share was trading 1.34% or Rs 24.25 lower at Rs 1,786.
Net profit fell to Rs 3,051.5 crore in first quarter ended June 30 against net profit of Rs 3,203.10 crore in June quarter of 2019. "On a consolidated basis, profit after tax stood at Rs 4,059 crore as compared to Rs 3,540 crore in Q1 FY20, registering a growth of 15 per cent," HDFC said.
HDFC said that the current and previous year's numbers are not directly comparable as most parts of the June quarter entailed a strict national lockdown in order to prevent the spread of COVID-19. Operations commenced on June 8, 2020 with the first phase of unlock that began on June 8, 2020.
The company received a dividend income of Rs 298 crore in June quarter, while profit on sale of investments stood at Rs 241 crore.
"After adjusting dividend, profit on the sale of investments, net gains on de-recognition of assigned loans, provisioning and the impact of negative carry on account of higher liquidity, the adjusted profit before tax for the quarter stood at Rs 3,265 crore compared to 2,684 crore in the previous year, reflecting a growth of 22 per cent," HDFC said.
Macquarie said HDFC posted a decent show in a tough quarter. The brokerage said 70% of the builder loan book was under moratorium and challenges to retail loan growth remain owing to lockdowns. Excess provisions can cushion against future losses. It gave a target price of Rs 2,095 for the stock.
Credit Suisse said the HDFC Board approved capital raising of Rs 14,000 crore. The brokerage projected raising equity of Rs 8,000 crore in FY21, on back of which it cut earnings rate by 6-7%. Credit Suisse gave target price of Rs 2,100 for the stock and said the lender has strong capital and provision buffer.