Brokerages cut HDFC price targets, but remain bullish
Bad loans to both individuals and real estate companies rose in the March quarter.
By ET Bureau | Updated:
PTI
HDFC shares fell 0.95 per cent to close at Rs 1,502.15 on Tuesday.
Mumbai: Brokerages have cut price targets on Housing Development Finance Corp (HDFC) stock by 2-32 per cent after its fourth quarter earnings, which were below analyst estimates. Deterioration in asset quality and growth slowdown are the key takeaways from the results though most analysts have maintained bullish ratings on the stock.
“While we believe HDFC is the best HFC franchise with disciplined underwriting and strong balance sheet, we are concerned about its growth outlook,” said Investec’s analysts Nidhesh Jain and Utsav Gogirwar in a note.
HDFC shares fell 0.95 per cent to close at Rs 1,502.15 on Tuesday.
Edelweiss Securities cut its earnings per share (EPS) estimates by 21 per cent in FY21 and by 35 per cent in FY22 to factor in the cut in growth and asset quality estimates.
Bad loans to both individuals and real estate companies rose in the March quarter. Kotak said HDFC reported a sharp rise in gross non-performing loans in its developer books to 4.7 per cent from 2.9 per cent.
“A challenging macro environment for the developers prompted HDFC to go slow for the past several quarters and create large buffers,” said Kotak’s analysts led by Nischint Chawathe.
