HDFC (vs) LIC HSG FINANCE = Q1 FY 12 RESULTS = COMPARISON = GOOD GROWTH FOR BOTH IN Q1= FUTURE EQUALLY PROMISING

HDFC (vs) LIC HSG FINANCE

Q1 FY 12 RESULTS

COMPARISON

HDFC and LIC Housing Finance are leaders in housing Finance segment. It is therefore interesting to compare their Q1 FY 2012 (Q/E June 2011) results.

Net Sales : HDFC  has clocked Rs.3800.67 cr – up by 35.88% from corresponding qtr of q1 FY 2011.  LIC HF has clocked Rs.1358.07         - up by 39.78% from Q1 FY 11. In % terms, LICHF has done more sales. But, in absolute terms – HDFC’s Q1 FY 12 Sales are higher by 179.86% compared to LIC HF’s Q1 FY 12 sales.

Total Expenditure        : HDFC’s total expenditure for q1 FY 12 is Rs.131.14 cr – up by 13.28% from Q1 FY 11; LICHF’s total expenditure is Rs.75.65 cr – up by 56.43% from Q1 FY 11. In absolute terms – HDFC is higher by 73.36%.This expenditure is a small percentage of total sales. Hence, not very consequential in determining profitability.

Profit from Operations : HDFC has clocked Rs.3669.53 cr – up by 36.85% from Q1 FY 11. LICHF has clocked Rs.1337.89 cr – up by 38.77% from Q1 FY 11. In absolute terms , HDFC is Higher by 174.28%.

Interest : HDFC has spent Rs.2514.93 cr – up by 46.25% from Q1 Fy11. LICHF has spent Rs.997.11 cr – up by 47.23% from Q1 FY 11. In absolute terms, HDFC has spent 152.22% more than LICHF.

Profit  before tax : HDFC has clocked Rs.1175.53 cr – up by 21.62% from Q1 FY 11; LICHF has clocked Rs.345.42 cr – up by 19.38% from Q1 FY 11. In absolute terms HDFCs PBT is bigger by 240.32%.

Net Profit : HDFC has clocked Rs.844.53 cr – up by 21.59% from Q1 FY 11; LICHF has clocked Rs.256.50 Cr – up by 20.98% from Q1 FY 11; In absolute terms HDFC is bigger by 229.25%.

Paid Up Equity of HDFC is Rs. 293.99 cr – against LICHF’s Rs.94.93 cr – in which also HDFC is bigger by 209.68%

Face Value of the shares of Both Now is Rs.2.

EPS of HDFC is Rs.5.75 while that of LIC HF is Rs.5.4. The annualized EPS for HDFC will be 5.75 x 4 = 23.00. Annualiszd EPS of LIC HF will be Rs.5.4 x 4 = Rs.22.

If size factor is ignored – in all other growth  parameters, as we can see from the above comparison - the percentages are almost the same for HDFC and LIC HF.  Consequently – the EPS also is almost the same.

Currently HDFC is quoting at Rs.  696  at a PE Ratio of  30.26 .But, LICHF is quoting at Rs.215.15 at a PE Ratio of 9.78.

Both HDFC and LICHF are forecasting reasonably good future business.

While the sentiment in respect of HDFC is bound to be higher in  view of its longer past and consistency – yet, LICHF also is performing equally well (except for the size differential) and therefore deserves Higher Valuations.

COMPARISON TABLE

ITEM	HDFC Q1FY12	HDFC Q1FY11	L H F Q1FY12	L H F Q1FY11	HDFC VS LIC
Net Sales	380067	279713	135807.3	97155.22	179.86
Employees Cost	5276	4515	1602.76	1488.87	229.18
Depreciation	446	401	169.94	152.41	162.45
Other Expenditure	7392	6661	5792.12	3194.58	27.62
Total Expenditure	13114	11577	7564.82	4835.86	73.36
Profit from Operations	366953	268136	133789	96409.56	174.28
Other Income	2093	482	464.42	247.62	350.67
Interest	251493	171959	99711.4	67723.07	152.22
Profit  before tax	117553	96659	34542.05	28934.11	240.32
Tax expense	33100	27200	8891.72	7732.38	272.26
Net Profit	84453	69459	25650.33	21201.73	229.25
Face Value (In Rs	2	10	2	10	0
Paid Up Equity	29399	29095	9493.26	9493.26	209.68
Basic EPS	5.75	24.02	5.4	22.33	6.48
Public Holding (%)	100	100	63.46	63.46

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