HDFC Q2 results tomorrow: Individual loan book to drive AUM, NIMs stable

Housing Development Finance Corporation is widely expected to report a double-digit rise in the topline for the quarter ended September, with higher growth in the mainstay individual loans aiding the overall loan book.

Analysts expect a 11-26% year-on-year (YoY) growth in HDFC’s net interest income for the reporting quarter. The mortgage lender is set to release its earnings on Thursday.

“We expect HDFC to deliver 4% QoQ loan growth in the individual segment, translating to a 19% growth in individual loans. Overall, loan growth is (seen) lower at 16% due to slower growth in the non-individual segment,” Kotak Institutional Equities said in its report.


Brokerage Motilal Oswal Securities expects the mortgage lender’s asset under management (AUM) growth to be healthy at 16% YoY.

At the end of the June quarter, HDFC’s AUM was Rs 6.7 lakh crore, registering growth of 17% from the year-ago period. The gross loan book was at Rs 5.8 lakh crore. Individual loans constituted 79% of the AUM at the end of June. At the AUM level, HDFC registered 19% growth in the individual loan book, which was the highest in 8 years, the lender had said.

On the profitability front, analysts expect net interest margin (NIM) to remain largely stable. Brokerage PhillipCapital, though, expects a YoY expansion in NIMs for HDFC.

The lender’s net profit for the quarter is expected to rise more than 10% on year to Rs 4,177 crore. Earnings aside, the major trigger for the stock will be HDFC’s merger with arm HDFC Bank. In October, HDFC had said it will hold a meeting with shareholders on November 25 to take their consent on the same.

The Street will look for further cues on this front from the company on Thursday.

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