Mehabe score: 3 G Factor: 5 Piotski Score: 3 The stock has a rating SELL. The mehabe team score is reflective of its fundamental and technical merits. A rating above 8 is considered good buy. The stock has a G-Factor of 5 and Piotski score of 3.
Description
Housing Development Finance Corporation Limited is an Indian financial services company based in Mumbai, India. It is a major housing finance provider in India. It also has a presence in banking, life and general insurance, asset management, venture capital, realty, education, deposits and education loans
Main Points
Pioneer In Housing Finance In India
In 1977, HDFC Ltd. became the first housing finance company in India #. Later, HDFC itself incorporated India’s next three housing finance companies – Gruh Finance #, SBI Home Finance and Can Fin Homes # #.Site:HDFCMain Symbol:HDFC
Stock trades at 2441.0, below its 50dma 2496.3. However it is trading above its 200dma 2413.65. The stock remains weak in the short term due to near term bearish momentum. However overall bullish structure remains intact. Price action will further build up as it moves above its dma50, currently situated at 2496.3.
The 52 week high is at 2896.00 and the 52week low is at 1623.00
Price Chart
P/E Chart
Sales and Margin
Strengths
– is expected to give good quarter
– has been maintaining a healthy dividend payout of 20.46%
-‘s median sales growth is 17.51% of last 10 years
Weakness
– Stock is trading at 2.82 times its book value
– has low interest coverage ratio.
Competition
– The industry trades at a mean P/E of 28.3x. AAVAS Financiers trades at the industry’s max P/E of 66.15x. HDFC trades at a P/E of 23.5x
– Industry’s mean G-Factor is 4.4 while the mean Piotski score is 8.0. HDFC has a G-Factor of 5 and Piotski scoreof 3.
– Average 1 month return for industry is -4.0%. The max 1- month return was given by Indiabulls Hous.: a return of 5.94 %
Quarterly Results
Sales for period ended Mar 2021 is Rs 35738.0 cr compared to Rs 16600.0 cr for period ended Mar 2020, a rise of 115.3%
Operating Profits reported at Rs 24212.0 cr for period ended Mar 2021 vis-vis 5414.0 for period ended Mar 2020 .
Operating Margins expanded 3513.4 bps for period ended Mar 2021 vis-vis Mar 2020 .
The EPS for Mar 2021 was Rs 29.66 compared to Rs 28.76 for previous quarter ended Dec 2020 and Rs 23.76 for Mar 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 139034.0 cr for period ended Mar 2021 vis-vis sales of Rs 101726.0 cr for the period ended Mar 2020, a healthy growth of 26.8%. The 3 year sales cagr stood at 20.5%.
Operating margins shrank to 17634.0% for period ended Mar 2021 vis-vis 20633.0% for period ended Mar 2020, contraction of 299900.0 bps.
Net Profit reported at Rs 18740.0 cr for period ended Mar 2021 vis-vis sales of Rs 21435.0 cr for the period ended Mar 2020, falling 14.4%.
Company recorded a healthy Net Profit CAGR of 16.1% over the last 3 years
Balance Sheet Statement
Cash Flow Statement
Cash Flow comments
Sales Growth
Profit Growth Statement
Profit Growth Statement
Stock Price CAGR
Return of Equity
General Comments
– The stock has given a return of 37% on a 1 Year basis vis-vis a return of 7% over the last 3 Years. – The compounded sales growth on a TTM bassis is 37% vis-vis a compounded sales growth of 20% over the last 3 Years. – The compounded profit growth on a TTM basis is -13% vis-vis a compounded profit growth of 16% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Jun 2021 fii holding stood at 72.22% vis-vis 72.78% for Mar 2021 – Public shareholding has remained largely constant. The Jun 2021 public holding stood at 11.18% vis-vis 10.88% for Mar 2021
Conclusion
– is expected to give good quarter
– has been maintaining a healthy dividend payout of 20.46%
-‘s median sales growth is 17.51% of last 10 years – Stock is trading at 2.82 times its book value
– has low interest coverage ratio.
Fundamentally, the stock remains weak. The business fundamentals are on shaky ground. Weak near term results have dampened and questioned business drivers. We suggest to wait for a upturn in business performance.
Technically, the stock reflects the poor fundamentals. The stock remains below its 50 DMA 2496.3 and is trading at 2441.0. It has shown near term lack of bullish momentum. We suggest to observe price action. However as investors, who like to avoid timing the markets, we suggest to avoid the stock
