InvestorQ : How do you see the prospects of the HDFC stock after the latest results announced for the December quarter?
sara Kunju made post

How do you see the prospects of the HDFC stock after the latest results announced for the December quarter?

Answer
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8 months ago


For the quarter ended December 2019, HDFC reported stand alone net profits of Rs.8,372 crore. However, this was boosted by a one-time gain on the sale of Gruh Finance to Bandhan Bank worth Rs.9020 crore. However, on the downside the provisions made by the company for bad debts went up sharply from Rs.116 crore in the December quarter last year to a level of Rs.2995 crore in the December quarter of 2019.

However, the total revenues of the company also grew by 92% for the December quarter to Rs.20,285 crore for the December quarter, while the net interest income (NII) for the quarter was also up by 13.6% to Rs.2958 crore. The loan book also showed a growth of nearly 14% to Rs.4,41,000 crore. The gross NPAs of HDFC still stood at a fairly comfortable level of 1.36% while the net NPAs stood at 0.75% as of the December quarter.

The stock reacted negatively on Monday and that was largely a mix of weak market conditions due to the China virus story and also because the profit growth has been tepid in this quarter. At the current price, the stock may be fully priced and you will have to wait for two quarters before taking a final call on the stock.