Brokerages remain bullish on Housing Development Finance Corporation (HDFC) after the non-banking financial company (NBFC) beat analysts’ estimates in the June quarter. Global brokerage Macquarie, Credit Suisse and CLSA all have maintained outperform calls on HDFC post Q1. The street, however, has not given a thumbs up to the numbers and the HDFC stock fell as much as 2.5 percent in intraday deals to Rs 1,760 per share on BSE. The stock has already declined over 25 percent in 2020 so far but only 2 percent in July.

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The country's largest mortgage lender reported a standalone net profit of Rs 3,051.5 crore in the first quarter of fiscal 2021 as against Rs 3,203.1 crore in the year-ago quarter, registering a fall of 4.71 percent. NII was in-line with the street expectations, up 8.4 percent to Rs 3,392 crore, while the net interest margin (NIM) during the quarter fell by 20 bps to 3.1 percent from 3.3 percent, compared annually again.

It also witnessed a decline in total loans under moratorium-2 to 22.4 percent from 27 percent in moratorium-1. Among these, individual loans under moratorium 2 were at 16.6 percent versus 22.6 percent in moratorium 1. Corporate loans under moratorium-2 accounted for 22.4 percent of total corporate loan book compared with 27 percent under moratorium 1, the company said.

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Global brokerage house Macquarie said that the company has reported decent numbers in a tough quarter, owing to the COVID-19 pandemic. It also noted that for the lender builders applied for moratorium the most with 70 percent of the builder loan book under moratorium. Also, retail loan growth also remains challenging due to lockdowns, it added.

The brokerage has an outperform rating on HDFC with a target at Rs 2,095 per share.

Meanwhile, CLSA also noted that moratorium of 16.6 percent individuals and 22.4 percent of total loans is the key highlight of the earnings. The over Rs 50,000 crore of the moratorium in the non-individual category can lead to uncertainty, it added.

Still, the brokerage expects loan/NI growth to revert to 10-12 percent from FY22 and believes that the valuation is reasonable at current levels. It also has an 'outperform' rating on the stock with a target at Rs 2,100 per share.

Credit Suisse, in its review report, raised the target price of HDFC to Rs 2,100 per share from Rs 1,800 earlier but cut the lender's earnings estimates by 6-7 percent.