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HDFC sustains earnings growth in FY2000 - Views on News from Equitymaster
 
 
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  • May 4, 2000

    HDFC sustains earnings growth in FY2000

    Housing Development Finance Corporation (HDFC) has reported a 20% rise in profits to Rs 4 bn for the FY2000. The company has benefited from a rise in interest spreads, strong volume growth and lower operating expenses.

    (Rs m) FY99 FY00 Change
    Income from Operations 17,469 20,129 15.2%
    Other Income 59 27 -53.9%
    Interest Expenses 12,505 14,370 14.9%
    Operating Profit (EBDIT) 4,964 5,759 16.0%
    Operating Profit Margin (%) 28.4% 28.6%  
    Other Expenses 636 742 16.7%
    Depreciation 498 436 -12.4%
    Profit before Tax 3,889 4,608 18.5%
    Tax 550 590 7.3%
    Profit after Tax/(Loss) 3,339 4,018 20.4%
    Net profit margin (%) 19.1% 20.0%  
    Earnings per share* 28.03 33.70  
    (annualised)      

    HDFC's disbursements grew by 30% to Rs 5.3 bn in FY2000 over the previous year. The company's deposits went up by 18% to Rs 6.2 bn from Rs 5.2 bn in the previous period.

    HDFC's net non performing assets (NPAs) declined to 0.9% of the total loan portfolio for FY2000 as against 1.01% in the previous period. The company's NPAs ratio is lowest among the housing finance companies and financial institutions.

    Housing Development Finance Corporation (HDFC) has reported a 20% rise in profits to Rs 4 bn for the FY2000. The company has benefited from a rise in interest spreads, strong volume growth and lower operating expenses.

    HDFC's disbursements grew by 30% to Rs 5.3 bn in FY2000 over the previous year. The company's deposits went up by 18% to Rs 6.2 bn from Rs 5.2 bn in the previous period.

    HDFC's net non performing assets (NPAs) declined to 0.9% of the total loan portfolio for FY2000 as against 1.01% in the previous period. The company's NPAs ratio is lowest among the housing finance companies and financial institutions.

    It has also received an approval from SEBI to set up a mutual fund as its wholly own subsidiary. The mutual fund proposes to launch its initial offerings in the form of equity, debt and balanced funds.

    At the current market price of Rs 464, HDFC is available at a P/E of 13.7 times its FY2000 earnings with a Price/Book value ratio of 2.6 times. Given the strong demand in housing sector, loan growth will continue to be robust. This will help the company to maintain its earnings growth. Also the incremental tax benefits on interest on housing loans from Rs 75,000 to Rs 100,000 may also lead to higher demand for housing loans.It has also received an approval from SEBI to set up a mutual fund as its wholly own subsidiary. The mutual fund proposes to launch its initial offerings in the form of equity, debt and balanced funds.

    At the current market price of Rs 464, HDFC is available at a P/E of 13.7 times its FY2000 earnings with a Price/Book value ratio of 2.6 times. Given the strong demand in housing sector, loan growth will continue to be robust. This will help the company to maintain its earnings growth. Also the incremental tax benefits on interest on housing loans from Rs 75,000 to Rs 100,000 may also lead to higher demand for housing loans.

     

     

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