X

Sign up for Equitymaster's free daily newsletter, The 5 Minute WrapUp and get access to our latest Multibagger guide (2018 Edition) on picking money-making stocks.

This is an entirely free service. No payments are to be made.


Download Now Subscribe to our free daily e-letter, The 5 Minute WrapUp and get this complimentary report.
We hate spam as much as you do. Check out our Privacy Policy and Terms Of Use.
HDFC: Insurance Stake Sale Gains Overshadow Provision Pain - Views on News from Equitymaster
StockSelect
  • MyStocks

MEMBER'S LOGINX

     
Login Failure
   
     
   
     
 
 
 
(Please do not use this option on a public machine)
 
     
 
 
 
  Sign Up | Forgot Password?  
  • Home
  • Outlook Arena
  • Aug 9, 2016 - HDFC: Insurance Stake Sale Gains Overshadow Provision Pain

HDFC: Insurance Stake Sale Gains Overshadow Provision Pain
Aug 9, 2016

HDFC declared its results for the first quarter (1QFY17). The institution has reported 7.5% YoY growth in net interest income while net profits have grown by a steep 37.5% YoY during 1QFY17. Here is our analysis of the results.

Performance summary
  • Net interest income grew by 7.5% YoY.
  • Provisions were up 7 folds due to one-time provision of Rs 2.8 billion made towards standard assets and other contingencies.
  • The other income surged by over 2000% YoY on account of profit on stake sale in the general insurance subsidiary HDFC Ergo.
  • Aided by higher other income, net profit grew by 37.5% YoY. Excluding the windfall income from stake sale in insurance business, the entity's 1QFY17 profits have fallen by 30% YoY.
  • Gross NPAs stand at 0.7% at the end of 30th June 2016.

    Standalone financial performance snapshot
    (Rs m) 1QFY16 1QFY17 Change
    Interest Income 69,955 74,607 6.6%
    Interest Expense 48,245 51,262 6.3%
    Net Interest Income 21,710 23,345 7.5%
    Net interest margins
    Other Income 339 9,327 2655.3%
    Other Expense 2,029 2,274 12.1%
    Provisions and contingencies 500 3,400 580.0%
    Profit before tax 19,520 26,997 38.3%
    Tax 5,910 8,290 40.3%
    Effective tax rate 30.3% 30.7%
    Deferred Tax Liability 0.0 0.0
    Profit after tax/ (loss) 13,610 18,707 37.5%
    Net profit margin (%) 19.5% 25.1%
    No. of shares (m) 1,582
    Book value per share (Rs)* 226
    P/BV (x) 6.0

    * (Standalone book value as on 30th June 2016)

To Read the Full Story, Subscribe or Sign In



DISCLOSURES UNDER SEBI (RESEARCH ANALYSTS) REGULATIONS, 2014
INTRODUCTION:
Equitymaster Agora Research Private Limited (hereinafter referred to as "Equitymaster"/"Company") was incorporated on October 25, 2007. Equitymaster is a joint venture between Quantum Information Services Private Limited (QIS) and Agora group. Equitymaster is a SEBI registered Research Analyst under the SEBI (Research Analysts) Regulations, 2014 with registration number INH000000537.

BUSINESS ACTIVITY:
An independent research initiative, Equitymaster is committed to providing honest and unbiased views, opinions and recommendations on various investment opportunities across asset classes.

DISCIPLINARY HISTORY:
There are no outstanding litigations against the Company, it subsidiaries and its Directors.

GENERAL TERMS AND CONDITIONS FOR RESEARCH REPORT:
For the terms and conditions for research reports click here.

DETAILS OF ASSOCIATES:
Details of Associates are available here.

DISCLOSURE WITH REGARDS TO OWNERSHIP AND MATERIAL CONFLICTS OF INTEREST:
  1. 'subject company' is a company on which a buy/sell/hold view or target price is given/changed in this Research Report.
  2. Equitymaster and its Associate have financial interest in HDFC Ltd.
  3. Equitymaster’s Research Analyst or his/her relative have no financial interest in the subject company.
  4. Neither Equitymaster, it’s Associates, Research Analyst or his/her relative have actual/beneficial ownership of one percent or more securities of the subject company at the end of the month immediately preceding the date of publication of the research report.
  5. Neither Equitymaster, it’s Associates, Research Analyst or his/her relative have any other material conflict of interest at the time of publication of the research report.
DISCLOSURE WITH REGARDS TO RECEIPT OF COMPENSATION:
  1. Neither Equitymaster nor it's Associates have received any compensation from the subject company in the past twelve months.
  2. Neither Equitymaster nor it's Associates have managed or co-managed public offering of securities for the subject company in the past twelve months.
  3. Neither Equitymaster nor it's Associates have received any compensation for investment banking or merchant banking or brokerage services from the subject company in the past twelve months.
  4. Neither Equitymaster nor it's Associates have received any compensation for products or services other than investment banking or merchant banking or brokerage services from the subject company in the past twelve months.
  5. Neither Equitymaster nor it's Associates have received any compensation or other benefits from the subject company or third party in connection with the research report.
GENERAL DISCLOSURES:
  1. The Research Analyst has not served as an officer, director or employee of the subject company.
  2. Equitymaster or the Research Analyst has not been engaged in market making activity for the subject company.
Definitions of Terms Used:
  1. Buy recommendation: This means that the subscriber could consider buying the concerned stock at current market price keeping in mind the tenure and objective of the recommendation service.
  2. Hold recommendation: This means that the subscriber could consider holding on to the shares of the company until further update and not buy more of the stock at current market price.
  3. Buy at lower price: This means that the subscriber should wait for some correction in the market price so that the stock can be bought at more attractive valuations keeping in mind the tenure and the objective of the service.
  4. Sell recommendation: This means that the subscriber could consider selling the stock at current market price keeping in mind the objective of the recommendation service.
Feedback:
If you have any feedback or query or wish to report a matter, please do not hesitate to write to us.

Become A Smarter Investor In
Just 5 Minutes

Multibagger Stocks Guide 2017
Get our special report, Multibagger Stocks Guide (2017 Edition) Now!
We will never sell or rent your email id.
Please read our Terms

HDFC SHARE PRICE


Oct 19, 2017 07:33 PM

TRACK HDFC

HDFC - SUNDARAM FINANCE COMPARISON

Compare Company With Charts

COMPARE HDFC WITH

MARKET STATS