MUMBAI: Mortgage lender HDFC Ltd. hit Rs5 trillion in market capitalisation on Friday, after its shares surged to touch a record high of Rs2,808 apiece on the BSE.
At 1221pm, the scrip traded at Rs2,795.50 apiece, up 1.3% from previous close, with a market cap of Rs5.03 trillion. The stock has jumped nearly 90% from its March lows.
HDFC Ltd is the sixth Indian company to have achieved this milestone, after Reliance Industries Ltd, Tata Consultancy Services Ltd, HDFC Bank Ltd, Hindustan Unilever Ltd, and Infosys Ltd.
Reliance Industries is India’s most-valued company with a market cap of Rs13.02 trillion, followed by Tata Consultancy Services at Rs12.05 trillion, and HDFC Bank with Rs8.75 trillion.
For the December quarter, HDFC reported a net profit of Rs2,930 crore, down 65% from a year ago. Net interest income rose 25% to Rs4,000 crore while operating profit grew 29% to Rs4,190 crore.
Its loan book advanced 9.3% year-on-year to Rs4.7 trillion, with individual and non individual loan book rising 10.5% and 8%, respectively. Assets under management grew 9.3%.
Brokerage firm PhillipCapital has said the individual home loan segment has witnessed impressive bounce back due to a favourable combination of lowest mortgage interest rate and some correction in property prices. HDFC Ltd being a dominant player witnessed similar faith in its individual loan portfolio. However, under construction projects have witnessed delays and low sales velocity due to the lockdown and a preference for ready to move in property.
“The impact of the same would trickle down to associated entities including the financiers. However we believe that HDFC’s superior know-how of the segment; strict underwriting practices and buffer provision would help it to better manage the credit loss,” Phillip Capital added.
HDFC’s asset quality remained stable in the last quarter, with stage three assets at 2.28% versus 2.19% in July-September. Also restructured assets stood at 0.9% of AUM.
“Business growth led by adequate capital and healthy earnings visibility on the back of funding advantage and provision buffer keeps us positive on the fundamental strength. We expect earnings to grow at 14% CAGR in FY21-23E with healthy RoA at 2.2% in FY23E”, said ICICI Direct in its note.
News Source:- Livemint