[www.niftyviews.com:23958] HDFC-Feb18 Dlv 31L Shares or 77 per cent; Is The Company In Trouble on LAP, Developer & Corp Exposure To Essar, Jubilant Life ...?????

[Rajiv Handa]

*Management expects retail loan growth to be in the 18-20% range.
Affordable housing segment is seeing good traction. However, corporate loan
growth will be a function of how the economy recovers.*
*Normally loan is driven 50% by volume and 50% by value; however, this year
growth was titled more towards value since Mumbai led the contribution (NCR
region has not picked up).*
*HDFC’s reliance on LAP is relatively low and forms <5% of individual loan
book.*

*HDFC had cut its prime lending rate by 25bps in the previous quarter, full
impact of which reflected in Q3FY16.*

*With hardening of bond yields, HDFC has increased yield on loans to
non-individual segment by 10bps.*

*Management is overall confident of asset quality within retail space. NPLs
within individual loan will continue to remain benign (GNPLs at 54bps in
Q3FY16 & 53bps in Q2FY16). Within non-individual loans, HDFC is focusing
only on construction finance and lease rental discounting loans.*

*HDFC had an exposure to Essar Group amounting to INR12bn. With Essar-RMZ
deal, debt outstanding for Essar will move to RMZ Group. Investment
conclusion Earnings growth trajectory has moderated and company, like many
peers, is witnessing pressure in growth and lending yields (given higher
competition). However, this will be offset by lower funding costs and
benefits from the recently concluded NCD + warrant issue of INR50bn at
relatively lower book yield.*

*But, moderation in balance sheet growth will cap revenue and earnings CAGR
to 1617% over FY16-18E. The stock, trading at 3.2x FY18E core mortgage
book, seems fairly valued. Key risks Increase in competition and sustained
slack in the mortgage market can lead to lower growth than our estimates.*

*Risk of fraud and NPA accretion due to increase in interest rates and fall
in property prices is inherent to the mortgage business*

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[www.niftyviews.com:23956] Fwd: Just Dial: Sustain Blw 585-605, may dial again 445-375

[Asis Ghosh]

 Forwarded Message 
Subject:Just Dial: Sustain Blw 585-605, may dial again 445-375
Date:   Fri, 19 Feb 2016 10:27:41 +0530
From:   Asis Ghosh 
Reply-To:   asis...@gmail.com



*Consecutive closing below 445-375 zone, JD may fall up to 295-235*

Buy back not so much attractive as it apparently seems;
 Such buy back also proves that the company has no viable business plan 
to deploy its cash

And its returning its cash to the big shareholders.



*CMP: 552*

*Sell either below 585 or on rise around 605-625-650;*

*TGT1: 491-445*-425-375 (1-3 M)*

*TGT2: 345-315-295*-235 (12-24M)*

*TSL> 670*

Note: Consecutive (3 days) closing above 670 for any reason, JD may 
further rally towards 715-760 & 800-840* and 885-950-1105-1250 zone in 
the alternative bullish case scenario.


With actual TTM EPS of 21.80, JD is quoting at around 25 PE against 
Google's average PE of 30.Comparison to Google's free search popularity 
and ad revenue JD is nothing and paid search concept may be a fiction.


Reasonable PE of JD may be around 20-15, even after considering their 
"Search Plus" and planned "JD-OMNI" application (which is also dubbed as 
"Mother of all application" by the management !!).


JD's proposed buy back of shares at price up to 1550 per share for 
around 11 lac shares (record date 04/12/2015) translates that the 
company will buy back only 2-3% from the market ( i.e. on average 2-3 
shares per 100 shares).


As on 02/12/2015 (T+2), closing price of JD was around 915. Clearly, big 
investors, who sold some of their holdings after that, may now covering 
that for tendering the same for buy back by the company, which will 
start from 25/02/2016. Investors has to pay also 10% capital gain tax 
for such offline buy back process. Thus the buy back is not looked so 
rosy as it apparently seems.


*As par BG metrics and current market scenario:*
(based on actual TTM & projected FWD EPS)

Present median valuation of JD may be around: 485 (FY:15/TTM)

Projected fair valuation might be around: 455-485-520 (FY:16-18/FWD)


SCRIP   EPS(TTM)BV(Act) P/E(AVG)Low HighMedian  
200-DEMA10-DEMA
JUSTDIAL21.895.46   15  552.69  411.68  482.19  934.16  518.3


JUSTDIAL19.25   114.5   15  519.36  386.86  453.11  934.16  518.3


JUSTDIAL21.75   137.75  15  552.06  411.21  481.64  934.16  518.3


JUSTDIAL25.05   165.85  15  592.46  441.31  516.88  934.16  518.3



*Analytical Charts:*














--
Thanks & Regards,

Asis Ghosh
(asisghosh.blogspot.com)
NCFM-TA CERTIFIED



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Disclaimer :-
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their individual experience and perceptions and to share information
with other members with the best of intentions to help fellow members
in investment decisions as equity investment is a risky venture.The administrator of 
www.Niftyviews.com just provide a platform for the authors to express their opinion 
and take no guarantee for the genuineness of the same."ANY member of this forum 
doesnt prepare or publish any research report; or ii. provide research report; or 
iii. make 'buy/sell/hold' recommendation; or iv. give price target;
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