HDFC scales record high after brokerage upgrade

HDFC gained 3.81% to Rs 1,695.45 at 11:14 IST on BSE after a foreign brokerage firm reportedly upgraded the stock to outperform from neutral citing better subsidiary valuations.

Meanwhile, the S&P BSE Sensex was up 258.98 points or 0.8% at 32,641.44.

On the BSE, 77,000 shares were traded on the counter so far as against the average daily volumes of 3.43 lakh shares in the past one quarter. The stock hit a high of Rs 1,698.75 in intraday trade so far, which is record high for the counter. The stock hit a low of Rs 1,643 so far during the day. The stock had hit a 52-week low of Rs 1,185 on 5 December 2016.

The stock had underperformed the market over the past one month till 26 July 2017, falling 1.1% compared with the Sensex's 4% rise. The stock had also underperformed the market over the past one quarter, rising 4.2% as against the Sensex's 7.46% rise. The scrip however outperformed the market over the past one year, gaining 17.69% as against the Sensex's 15.75% rise.

The large-cap company has equity capital of Rs 318.58 crore. Face value per share is Rs 2.

A foreign brokerage firm reportedly upgraded the HDFC stock to outperform from neutral and also hiked the price target on the company to Rs 1,890 from Rs 1,635. The foreign brokerage cited better subsidiary valuations as one of the key reasons behind the upgrade. It expects dividend income from HDFC Bank to reflect from the second quarter of the year ending 31 March 2018. An improving net interest margin amidst intense competition is an encouraging sign, the foreign brokerage said in its research note.

HDFC's net profit fell 16.84% to Rs 1555.74 crore on 3% fall in total income to Rs 8141.76 crore in Q1 June 2017 over Q1 June 2016. The company announced its Q1 results during market hours yesterday, 26 July 2017, when the stock rose 0.06% to settle at Rs 1,633.25.

HDFC's board of directors at its meeting held yesterday, 26 July 2017, approved issue of secured, redeemable, non convertible debentures aggregating Rs 35000 crore on private placement basis.

HDFC is India's first retail housing finance company and is currently one of the largest originators of housing loans in the country.

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