HDFC Q3 preview: Profit likely to jump 3-4 times on one-time gain

Mumbai: Mortgage lender Housing Development Finance Corporation (HDFC) is expected to report three-four times jump in profit for the December quarter buoyed by one-time fair value gain on derecognition of investment in Gruh Finance. The NBFC is slated to release its quarterly number on Monday.Kotak Institutional Equities expects HDFC to post a 303.78 per cent jump in profit at Rs 8,527.8 crore. The brokerage pointed out that post merger of Gruh Finance with Bandhan bank, HDFC has recorded a fair value gain of Rs 9,000 crore, and the company will likely set aside 30 per cent of the gains – Rs 2,700 crore -- as extraordinary provisions.Net interest income (NII) may come in at Rs 3,125 crore, up 8.5 per cent from the year-ago period.Kotak analysts expect HDFC to deliver 14 per cent year-on-year (YoY) growth in assets under management (AUM) on the back of 17 per cent YoY growth in retail business even as non-individual loan book may remain flat on a sequential basis.Net interest margins (NIM) will likely remain stable at 2.4 per cent QoQ as decline in marginal cost of funds was passed on to new retail borrowers, and credit cost (excluding extraordinary provisions) will likely remain stable at about 25 basis points of AUM.Edelweiss expects HDFC to post a profit of Rs 8,417.1 crore, a rise of 298.2 crore.“We are estimating NII growth of 10- 12 per cent, though due to one-time fair value gain, earnings growth will optically look higher. Individual loan growth momentum will be 14-16 per cent though conservative stance on corporate book will lead to AUM growth of 8-10 per cent,” the brokerage said.Motilal Oswal Financial Services expects the mortgage lending giant to post profit of Rs 6,428.40 crore, a rise of 204.10 per cent. It sees NII rising 7.2 per cent to Rs 3,086.7 crore.Antique Stock Broking expects the mortgage lender to post a 196 per cent rise in profit for the quarter to Rs 6,253.80 crore, while NII may rise 3 per cent to Rs 3,100.2 crore.

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