Buy Housing Development Finance Corporation, target price Rs 3050: Motilal Oswal Financial Services

Motilal Oswal Financial Services has buy call on Housing Development Finance Corporation with a target price of Rs 3050. The current market price of Housing Development Finance Corporation is Rs 2662.

Housing Development Finance Corporation, incorporated in the year 1977, is a Large Cap company (having a market cap of Rs 485016.10 Crore) operating in NBFC sector.

Housing Development Finance Corporation key Products/Revenue Segments include Interest, Income From Sale Of Share & Securities, Dividend, Other Services, Fees & Commission Income and Rental Income for the year ending 31-Mar-2022.

Financials
For the quarter ended 31-12-2022, the company has reported a Consolidated Total Income of Rs 41223.06 Crore, down -6.16 % from last quarter Total Income of Rs 43927.29 Crore and up 31.67 % from last year same quarter Total Income of Rs 31307.69 Crore. Company has reported net profit after tax of Rs 4030.30 Crore in latest quarter.

The company’s top management includes Mr.Deepak S Parekh, Mr.Rajesh Narain Gupta, Mrs.Ireena Vittal, Dr.Bhaskar Ghosh, Mr.U K Sinha, Mr.Jalaj Dani, Mr.V Srinivasa Rangan, Ms.Renu Sud Karnad, Mr.Keki M Mistry, Mr.P R Ramesh. Company has S R Batliboi & Co. LLP as its auditors. As on 31-12-2022, the company has a total of 183 Crore shares outstanding.

Investment Rationale
The brokerage expects HDFC’s margin to exhibit minor improvement in 4QFY23. With overall provisions at 2.2% of EAD, HDFC has made adequate provisions for any contingencies in asset quality.

The brokerage expects HDFC to deliver an AUM and PAT CAGR of ~13% and 14% over FY23-25, respectively, which will translate into a core RoA/RoE of 2%/14% by FY25.

Promoter/FII Holdings
Promoters held $Parser.toNumber($MarketsData-marketResults.newShareHolding.summary.promoters.percentage) per cent stake in the company as of 31-Dec-2022, while FIIs owned 67.22 per cent, DIIs 21.55 per cent.