Result Analysis: HDFC Limited (CMP: Rs.2613) Result Update: Q3FY23

HDFC Limited is largest and leading Housing Finance Company in India which is engaged in providing finance to individuals, corporates and developers for the purchase, construction, development and repair of houses, apartments and commercial properties in India. The company is also present in the banking, life insurance, asset management, venture capital, education deposits and loans via its subsidiaries.

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    Stock Details
    Market Cap. (Cr.) 477298
    Equity (Cr.) 365.35
    Face Value 2
    52 Wk. high/low 2855 / 2027
    BSE Code 500010
    NSE Code HDFC
    Book Value (Rs) 1010.92
    Sector Finance – Housing – Large


    Key Ratios
    Debt-equity: 2.84
    ROCE (%): 8.59
    ROE (%): 14.29
    TTM EPS: 136.83
    P/BV: 2.6
    TTM P/E: 19.1


    Financial Performance:

    Result Highlights:

    • HDFC has delivered largely in-lined results in Q3FY23 by laying a 30% YoY and 10% QoQ increase in the interest income to Rs.14,534 cr. Net profits of the company grew by 13% YoY to Rs.2,973 cr.

    • Net Interest Income of the company grew by 13% YoY to Rs.4,840 cr. while Net Interest Margin decreased slightly by 10 bps on YoY basis to 3.5% due to the elevated credit cost in the quarter by 41% YoY.

    • In the quarter, provisions stood at Rs.370 cr., down by 22% comparing with Rs.473cr. of previous quarter.

    • Company’s total asset under management (AUM) grew to Rs.7.01 lakh cr. by 13.3% YoY in Q3FY23 compared to Rs.6.2 lakh cr. in Q3FY22. On an AUM basis, the growth in the individual loan book was 18% and growth in the total loan book on an AUM basis was 13%

    • Across total loan book, Individual loans grew with 17.4%, which comprises ~80% of the gross loan book while corporate loans de-grew by 6% compared to previous year December quarter.

    • Among businesses, Securities lending AUM and commercial lending AUM grew with 45% and 42% respectively on YoY basis. SME lending AUM and mortgages AUM also increased with 33% and 26% YoY.

    • Asset quality of the company remained stable with Gross NPA of 1.49% decrease of 10bps sequentially and 83bps on YoY basis. Individual bad loans stood at 0.86% vs. 1.44% and wholesale bad loans stood at 3.89% vs. 5.04% comparing with previous year same quarter.

    • Gross stage 3 assets, which include loans in default for more than 90 days, stood at Rs 10,951 crore, down 3.5% sequentially.

    • Company has 724 outlets which include 213 offices of HDFC’s distribution company at the end of December 31, 2022.
    • Regarding the merger with HDFC Bank, company said the final hearing with NCLT is on 3rd Feb, 2023 and clarification is awaited from RBI with regards to various forbearance related for the merger.

    Shareholding Pattern:

    Particulars %
    Promoters & Promoter Group 0
    FIIs 67.56
    DIIs 21.75
    Public 9.84
    Others 0.85


    HDFC reported healthy Q3FY23 results with PAT surging 13% YoY on the back of strong loan disbursals and decline in the provisions. Net Interest Income of the company increased by 13% with NIM improving 10bps YoY. Individual loans has shown robust growth, also asset quality of the company has improved in the quarter. HDFC has delivered the earnings of Rs.101.9 in the last 9 months and we expect the company to close FY23 at the estimated EPS of Rs.135.9 and on the basis of estimated earnings the PE of the company stands at 19.3x on current price.


    Particulars (In Rs. Cr.) Q3FY23 Q2FY23 Q3FY22 QoQ% YoY%
    Interest earned 14,534 13,199 11,157 10.1% 30.3%
    Interest Expended 9,694 8,560 6,873 13.3% 41.0%
    Net Interest Income 4,840 4,639 4,284 4.3% 13.0%
    Operating Profit 4,982 5,887 4,441 -15.4% 12.2%
    Provisions 370 473 393 -21.8% -5.9%
    Tax 921 960 787 -4.0% 17.0%
    Net Profit after tax 3,691 4,454 3,261 -17.1% 13.2%
    Segment Revenue (In Rs. Cr.) Q3FY23 Q2FY23 QoQ% Q3FY22 YoY%
    Loans 15609 15339 1.8% 12,006 30.0%
    Life Insurance 19355 23302 -16.9% 13,944 38.8%
    General Insurance 6132 6039 1.5% 4,979 23.2%
    Asset Management 547 595 -8.0% 575 -4.8%
    Others 193 692 -72.1% 200 -3.4%
    Total Segment Revenue 41836 45967 -9.0% 31,705 32.0%
    Unallocated Revenue 106 107 -0.9% 87 22.4%
    Less: Inter Segment Revenue 720 2148 -66.5% 484 48.7%
    Total Revenue from Operations 41222 43927 -6.2% 31,221 32.0%
    Loans Q3FY23 Revenue % Q3FY22 YoY%
    Individuals 4,79,316 79.6% 4,08,356 17.4%
    Corporate Bodies 1,17,062 19.4% 1,24,526 -6.0%
    Others 5,977 1.0% 6,112 -2.2%
    Gross Loan Book 6,02,355 100.0% 5,38,994 11.8%
    Ratios (%) Q3FY23 Q3FY22
    Net Interest Margin 3.5 3.6
    Capital Adequacy Ratio 23.7 22.4
    Gross NPA 1.49 2.32
    Source: Company website, EWL Research

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