The individual loan business continued to see improvements during the December quarter, HDFC said in a regulatory filing.
Following the development, the stock rose 1.7 per cent to hit a high of Rs 2,623.40 on BSE.
Motilal Oswal Securities said HDFC remains its preferred picks in the sector.
“We like HDFCâs ability to gain profitable market share despite significant competitive pressures. Additionally, contrary to initial expectations, the real estate market has seen a swift turnaround. With incremental cost of funds from the capital markets at 5â5.5 per cent, the company would be able to manage spreads despite the sharp cut in home loan yield,” it said.
HDFC has built in large provision buffers to help it sustain a spike in non-performing loans (NPLs) in the coming quarters, it said while expecting the HFC to deliver core RoE of 12â14 per cent over the medium term.
For the nine months ended December 31, 2020, individual loan disbursements stood at 86 per cent of the levels in the corresponding period of the previous year, HDFC said.
During the quarter, the profit on sale of investments was Rs 157 crore, it said, adding this was on account of the sale of 25,48,750 equity shares of HDFC Life Insurance Company Limited (HDFC Life).
HDFC’s shareholding in HDFC Life now stands at 49.99 per cent. This has met the RBI’s mandate of reducing its shareholding in HDFC Life to 50 per cent or below by December 16, 2020, it added.