HDFC to announce Q4 result today; here's what you should watch out for

Housing finance company HDFC is scheduled to announce with its March quarter earnings on May 13.

Research and broking firm Motilal Oswal expects HDFC to report a net profit of Rs 2,374 crore. Net Sales are expected at Rs 2,900.3 crore, the report added.

The numbers are not comparable on a YoY basis as the company will be giving out results with a different accountancy standard (IndAS).

Earnings before interest, tax, depreciation and amortisation (EBITDA) is likely to fall by 14.7 percent Y-o-Y (down 9.1 percent Q-o-Q) to Rs 2,595.3 crore.

According to a CNBC-TV18 Poll, net interest income is seen at Rs 3,079.3 crore against Rs 3,001.8 crore in the corresponding quarter of the previous year. On the other hand, net profit is seen at Rs 2,576.2 crore against Rs 2,846.2 crore.

Emkay Global Financial Services expects HDFC’s loan growth to remain healthy at ~17 percent backed by increasing market share in individual loans. The trend in sanctions in the affordable housing segment will continue to be crucial for future growth trends.

Asset quality is likely to remain stable but management commentary on developer portfolio will be a key monitorable, it added.

Research firm Narnolia is of the view that NII is expected to grow at 9 percent QoQ in 4QFY19 driven by margin expansion. AUM growth is expected to still remain under pressure with 16 percent in 4QFY19 driven by individual segment.

NIM is expected to expand in 4QFY19, driven by fall in marginal cost of borrowing by 20-30 bps while Management has altogether taken 70 bps hike in PLR from April which will help in margin expansion. Other Income is expected to decline as dividend income from HDFCAMC has declined to Rs 12 dividend per share against Rs 16 last year, the research firm added.

Key things to watch:

Stability in NIM will be positive

AUM growth could come down to 14-15 percent

GNPA below 1.25 percent will be positive for the company

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NiftyBank climbs 30K; HDFC Bank hits fresh 52-week high

Rising for the 9th consecutive day, the NiftyBank zoomed to a fresh record high as it surpassed the crucial psychological level of 30,000 to hit a fresh lifetime intraday high of 30,004 on Friday.

The rally in the index was led by gains in Axis Bank, Yes Bank, RBL Bank, Bank of Baroda, ICICI Bank, Kotak Mahindra Bank, SBI etc. among others.

HDFC Bank which hit a fresh 52-week high of 2,307 in intraday trade on Friday witnessed some profit taking at higher levels.

The NiftyBank witnessed a stellar rally so far in March as the index rose by about 12 percent. It rose from 26,789 recorded on 28 February to a record high of 30,004 which translates into a rise of about 12 percent.

Most experts feel that the index after surpassing 30,000 will look for the next target of around 30,200 levels, as NiftyBank continues to make higher highs and higher lows, but after a sharp up move, a round of profit booking could be on the cards.

“Bank Nifty made a new lifetime high of 29,885 mark and managed to hold above 29650 zones on its weekly expiry day on Wednesday. It has been making higher lows from past fourteenth trading sessions which suggest supports are gradually shifting higher,” Chandan Taparia, Associate Vice President | Analyst-Derivatives at Motilal Oswal Financial Services told Moneycontrol.

“It has to continue to hold above 29500-29600 zones to extend its momentum towards 30,200 zones,” he said.

Banking index witnessed one of the sharpest moves in the last couple of years and gained almost 1600 points during the week.

With continued buying seen from the foreign institutional investors (FIIs), almost every stock observed sharp gains where IndusInd Bank saw a surge of almost 12 percent during the week. While other private sector banks saw gains around 6 percent.

The open interest in Bank Nifty has swelled sharply along with the up move and the current open interest in the index is the highest seen since August 2018 suggesting long build-up, said an ICICIdirect report.

In the last week itself, more than 30 percent open interest was added in the banking index. Due to recently formed leverage position and sharp up move a round of profit booking cannot be ruled out, added the report.

From the options space, the highest Put base is seen at 29000 strikes for the upcoming weekly settlement. On the other hand, due to sharp upsides, no major Call base is visible.

ICICIdirect expects these levels to remain crucial support in the shortened week. Bank Nifty, being the leader of the current move, the price ratio of Bank Nifty/Nifty has also moved to its life high levels of 2.57.

Some cool-off towards its previous highs of 2.55 cannot be ruled out in the coming sessions. However, this decline should be utilized to buy the Banking index once again.

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Source: Moneycontrol

HDFC Life slips 5% as offer for sale by JV partner opens today

HDFC Life Insurance Company shares tanked more than 5 percent in morning on Tuesday as the offer for sale by joint venture partner opened for subscription today.

The stock was quoting at Rs 374.90, down Rs 14.90, or 3.82 percent on the BSE, at 10:13 hours IST.

The company announced on Monday that Standard Life (Mauritius Holdings) 2006 Limited, the joint venture partner, would sell its up to 7 crore equity shares (representing 3.47 percent of the total issued and paid-up equity) on March 12 and March 13.

The co-promoter also has an option to additionally sell up to 2.95 crore equity shares (representing 1.46 percent) in case of oversubscription of issue.

The offer for sale issue will open for subscription for non-retail investors on March 12 and for retail as well as non-retail on March 13, and will be conducted through a separate, designated window of BSE and National Stock Exchange of India.

The floor price for the sale is fixed at Rs 357.50, which is 8.3 percent discount to Monday's closing price.

Promoter HDFC held 51.48 percent stake in HDFC Life and the rest 29.23 percent is held by its joint venture partner Standard Life (Mauritius Holdings) 2006 Limited, as per the shareholding pattern of December 2018.

After the offer for sale, Standard Life's shareholding will be reduced to 24.3 percent if both offer for sale and additional stake sale took place as per plan.

A spokesperson of HDFC Life said, "We have noted the disclosure published by Standard Life Aberdeen (SLA) about their intent to sell 4.93 percent of the total shares outstanding as on date through offer for sale (OFS) mechanism. In our opinion, a sell down of 4.93 percent would help the company increase it's public float to 24.2 percent which is a step closer to IT achieving minimum public shareholding (MPS) prescribed by SEBI."

The SEBI Listing Regulations mandates all listed companies to achieve MPS of 25 percent within 3 years of listing.

"The above sale is a secondary offer and will not impact the capital position of the company," the spokesperson said.

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Source: Moneycontrol