Small-ticket acquisition lifts HDFC

16 November 2009

Monday, November 16, 2009 (New Delhi)

Housing Development Finance Corporation rose 0.89% to Rs 2783 at 9:56 IST on BSE, after the company agreed to acquire 41% stake in Mumbai-based HDFC Credila Financial Services from DSP Merrill Lynch Capital.

The company made this announcement after market hours on Friday, 13 November 2009.

Meanwhile, the BSE Sensex was up 162.63 points, or 0.97%, to 17,011.46.

On BSE, 569 shares were traded in the counter as against an average daily volume of 94,289 shares in the past one quarter.

The stock hit a high of Rs 2798.70 and a low of Rs 2770 so far during the day. The stock had hit a 52-week high of Rs 2875 on 15 October 2009 and a 52-week low of Rs 1116.10 on 6 March 2009.

The large-cap stock had outperformed the market over the past one month till 13 November 2009, rising 0.01% as compared to the Sensex's 1.04% fall. It had also outperformed the market in the past one quarter, gaining 16.76% as compared to the Sensex's return of 8.57%.

The company's equity capital is Rs 285.35 crore. Face value per share is Rs 10.

The current price of Rs 2783 discounts the company's Q2 September 2009 annualized EPS of Rs 93.22, by a PE multiple of 29.85.

HDFC Credila Financial Services specializes in student loans, especially for students going abroad. The non-banking financial company (NBFC) has a loan portfolio of around Rs 20 crore.

Housing Development Finance Corporation (HDFC)'s net profit rose 24.3% to Rs 663.94 crore on 8.8% increase in total income to Rs 2850.23 crore in Q2 September 2009 over Q2 September 2008.

Increase in loan disbursements, reduction in cost of funds, and lower non-performing loans helped HDFC post better profits.

HDFC provides long-term housing loans to low and middle-income individuals, as well as to corporations. HDFC also provides construction finance to real estate developers, besides providing lease-financing facilities to companies and development authorities for infrastructure and other assets.