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HDFC: Conservative Provisioning tempers down FY17 earnings - Views on News from Equitymaster
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  • May 9, 2017 - HDFC: Conservative Provisioning tempers down FY17 earnings

HDFC: Conservative Provisioning tempers down FY17 earnings
May 9, 2017

HDFC declared its results for the fourth quarter (4QFY17). The institution has reported 13.2% YoY growth in net interest income while net profits have fallen by 21.6% YoY during 4QFY17. Here is our analysis of the results.

Standalone financial performance snapshot
(Rs m) 4QFY16 4QFY17 Change FY16 FY17 Change
Interest Income 76,294 83,606 9.6% 288,926 317,044 9.7%
Interest Expense 48,699 52,379 7.6% 193,745 208,962 7.9%
Net Interest Income 27,595 31,226 13.2% 95,181 108,082 13.6%
Net interest margins 4.10% 4.10%
Other Income 12,768 2,839 -77.8% 20,561 16,826 -18.2%
Other Expense 2,992 3,203 7.1% 12,011 13,391 11.5%
Provisions and contingencies 950 1,480 55.8% 2,650 4,250 60.4%
Profit before tax 36,421 29,382 -19.3% 101,081 107,266 6.1%
Tax 10,350 8,940 -13.6% 30,150 32,840 8.9%
Effective tax rate 28.4% 30.4% 29.8% 30.6%
Deferred Tax Liability 0.0 0.0 0.0
Profit after tax/ (loss) 26,071 20,442 -21.6% 70,931 74,426 4.9%
Net profit margin (%) 34.2% 24.5% 24.5% 23.5%
No. of shares (m) 1588.7
Book value per share (Rs)* 250.0
P/BV (x) 6.2

* (Standalone book value as on 31st March 2017)

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