ICICI Securities: HDFC - More Than Adequate Buffers To Navigate The Cycle
Information leaflets are displayed at a Housing Development Finance Corp. (HDFC) bank branch in Mumbai, India. (Photographer: Dhiraj Singh/Bloomberg)

ICICI Securities: HDFC - More Than Adequate Buffers To Navigate The Cycle

BQ Blue’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages. These reports offer BloombergQuint’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.

ICICI Securities Report

Housing Development Finance Corporation Ltd. has strengthened its balance sheet further with recent capital raise (shoring up Tier-1 to 19.5%) over and above provisioning buffer of 2.64% of asset under management and excess liquidity (at more 5% of balance sheet).

While movement from moratorium 1.0 to moratarium 2.0 has not been overwhelming (higher print at 16.6% for retail and 39% for non-retail) due to request-based disclosure approach (not collection efficiency), flow into restructuring will still be restricted.

Similar to actions in Q4 FY20, HDFC might proactively prefer recognising non-Covid-19 stress upfront (rather than restructuring).

Disbursement trends month on month (more than 80% in July) suggest normalisation in a couple of months and start of growth phase post Q3 FY21.

Click on the attachment to read the full report:

ICICI Securities HDFC Update.pdf

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