HDFC's Q2 earnings preview: Here’s what brokerages expect

Despite slowdown in certain key sectors of lending, analysts are upbeat on HDFC’s earnings.

BCCL
Edelweiss Securities said profit on sale of investments and higher dividend income will be partially offset by mark-down on RBL investment MTM and DTA impact.
Housing Development Finance Corporation (HDFC) shares were flat on Monday ahead of its September quarter result scheduled later in the day.

The stock was trading at Rs 2,133, up 0.23 per cent on BSE at 11.12 am.

Despite slowdown in certain key sectors of lending, analysts are upbeat on HDFC’s earnings. “Led by higher other income of Rs 3,421 crore, largely due to gain of Rs 1,632 crore from stake sale in Gruh Finance and Rs 1,074 crore dividend from subsidiary, HDFC is expected to report strong growth in net profit of 47 per cent YoY to Rs 3,628 crore,” ICICIdirect said in its earnings preview.


The brokerage, however, sees slowdown in the real-estate sector to impact credit growth. It expects the same at 11.5 per cent YoY to Rs 4,22,687 crore, compared to normal trajectory of 16-17 per cent YoY.

Edelweiss Securities said profit on sale of investments and higher dividend income will be partially offset by mark-down on RBL investment MTM and DTA impact. It expects profit at Rs 3,863, up 57 per cent from year-ago period.

Individual loan growth momentum will be 14-16 per cent, though a conservative stance on corporate book will lead to AUM growth of 12-14 per cent, said Edelweiss. It is estimating NII growth at 15-16 per cent.
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ICICIdirect said cut in lending and borrowing rate will keep margin stable at 2.36 per cent. Consequently, NII is seen at Rs 2,808 crore, up 16.5 per cent YoY. Asset quality may remain largely stable with GNPA ratio at 1.33 per cent.

Traders will keenly watch the outlook on developer loan portfolio, revival of real estate sector demand & resolution of Jet Airways would be keenly watched.
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