 "HDFC hits record high on NSE")
Shares of housing finance major Housing Development Finance Corporation (HDFC) has moved higher by 2% at Rs 1,370, also its record high on National Stock Exchange (NSE), in an otherwise weak market.
Thus far in the current calendar year 2015, the stock has outperformed the market by gaining 20% as compared to 5% rise in CNX Nifty.
Alpesh Mehta and Sunesh Khanna, analysts at Motilal Oswal Securities in report dated 29 January 2015, recommended ‘buy’ rating with a target price of Rs 1,410.
“Despite higher competitive intensity in home loans, HDFC maintained its strong growth in individual segment without compromising profitability. HDFC is expected to pass on benefit of sharp fall in borrowing rates to customers which will boost its growth further. While near term business growth to be driven by momentum in individual segment, expected pick-up on corporate side (led by improving economy) could provide strong delta on earnings (high fees and spreads),” analysts said in a report.
HDFC is likely to be the most resilient in asset quality (cash flow-based lending, strong collateral in place etc) and growth (structural factors to aid). Subsidiaries/associates are self-funded and thus further dilution is not needed to take care of their capital requirements; strong internal accrual (core lending RoE of 25%+) will take care of HDFC’s loan growth requirements, added report.
Thus far in the current calendar year 2015, the stock has outperformed the market by gaining 20% as compared to 5% rise in CNX Nifty.
Alpesh Mehta and Sunesh Khanna, analysts at Motilal Oswal Securities in report dated 29 January 2015, recommended ‘buy’ rating with a target price of Rs 1,410.
“Despite higher competitive intensity in home loans, HDFC maintained its strong growth in individual segment without compromising profitability. HDFC is expected to pass on benefit of sharp fall in borrowing rates to customers which will boost its growth further. While near term business growth to be driven by momentum in individual segment, expected pick-up on corporate side (led by improving economy) could provide strong delta on earnings (high fees and spreads),” analysts said in a report.
HDFC is likely to be the most resilient in asset quality (cash flow-based lending, strong collateral in place etc) and growth (structural factors to aid). Subsidiaries/associates are self-funded and thus further dilution is not needed to take care of their capital requirements; strong internal accrual (core lending RoE of 25%+) will take care of HDFC’s loan growth requirements, added report.