Analyzing HDB’s Financial Performance For FY 23-24.

HDB Financial Services has been in the news for a while as the HDFC Bank’s financial arm is expected to launch its IPO this year. The NBFC has been a centre of attraction in the unlisted share market. Let’s analyse their annual financial results and check if the HDB share is a good investment opportunity.

What Is The Financial Performance of HDB?

Revenue of HDB- The NBFC earns majorly through the interest earned from loans given and other income. In FY24, the NBFC earned 11,157 crores through interest income, a significant increase of 25% from Rs 8,928 crores the previous year.

On the contrary, the other income indicated a slim decline from Rs 2,634 crore in FY 23 to Rs 1,950 crore in FY 24. The total revenue still increased from Rs 12,403 crore to Rs 14,171 crore in FY 24, suggesting a stable revenue growth.

Profit After Tax(PAT) - Despite fluctuations in other income, HDB’s overall profitability still increased by 25.6 % as the PAT soared to Rs 2,461 crores in FY24 as compared to Rs 1,959 crores in the previous years. The Net Profit Margin also increased by 15.8% to 17.36%.

The Loan Book of HDB Financial Services had a significant annual growth of 30.63%, concerning the loans given by HDB as the FY 23 & FY 24 loan book increased from Rs 66,382.7 crore to Rs 86721.3 crore.

This suggests an assertive growth in the lending operations of HDB Financial Services and a potential upward demand for their products and services.

The Earnings Per Share(EPS) showed a significant growth from Rs 24.78 in FY 23 to Rs 31.08 per share in FY 24, an approximate 25% increase. This indicates a growth in shareholder wealth and also impacts the hdb share price.

The NBFC now has more liquidity to cover its debts as its liquidity coverage ratio increased from 130% in FY23 to 140% in FY24.

The Gross NPA has improved significantly in the last 3 years. On March 22, the gross NPA reached 4.99% which caused concern among investors as the asset quality was deteriorating. On March 23, the asset quality improved to 2.73%. By the end of FY 23-24, the Gross NPA had reduced to 1.9%.

This signifies a huge positive trend in the enhancement of credit quality and risk management. HDB has made an effort to increase the financial health of its balance sheet.

Japan’s MUFG Wants to Buy HDB Financial Services Unlisted Shares.

According to a Bloomberg report, Japan’s MUFG is in talks to invest $2 billion into HDB Financial Services. MUFG is likely interested in a 20% stake that will boost the HDB’s valuation up to $10 billion. This highlights the interest of international financial institutions in India’s growing non-bank lending sector, particularly HDB.

HDB IPO Date

HDFC Bank, the biggest private lender in India, has started making arrangements for the much-anticipated IPO of its NBFC Arm. The timing of this IPO is important as HDB must follow the RBI guidelines and list its shares before September 2025. So HDFC Bank can list in the 4th quarter of 2024 or the 1st quarter of 2025.

Is HDB Stock a Good Buy?

All the significant parameters of HDB Financial Shares have shown a positive indicator. This includes revenue, profit, EPS, and the increasing loan book. The operations of HDB have increased in the last 1 year, with its asset quality improving year on year. Hence actively traded in the unlisted share market.

Backed by HDFC, the current hdb financial share price can be a gainful buy, especially with IPO around the corner. At Stockify, we help our clients uncover the best-unlisted shares and increase their wealth with our in-depth research and insights. Our platform serves all your unlisted share needs with the best offerings.

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