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In-Depth Performance Analysis Of HDB Financial Services
HDB Financial Services is growing fast, reflected by its increasing stock demands. In this blog, we speculate if the trend is going to last long.
Company profileHDB Financial Services Limited
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The financial results for the third quarter of the financial year 2022-23 provide significant insights into the performance of HDB Financial Services, a leading player in the Indian financial industry. HDB has been making a name for itself in recent years and has emerged as a critical loan and asset finance provider in non-banking financial services. Moreover, the experts’ reviews have been advocating the investors’ attention on the HDB unlisted shares. Major reviews and guidance by leading financial advisors have chosen HDB financial services as one of the most promising emerging stocks. Moreover, they claim that the momentum for HDB financial services will likely continue.
HDB Financial Figures FY23: A Comparative Study
We need a double-folded perspective to understand where HDB Financial Services is heading and its future standing in the stock market. There are two critical areas to speculate on here. Firstly, we need to investigate the performance of HDB Financial Services in the last year and compare it with the previous year's reports. Subsequently, we would couple that with the market factors, prevalent trends, and economic predictions for the coming years. An integrated study like this will allow us to draw qualitative conclusions on the future of HDB Financial Services.
Understanding the future of the HDB Finance share price before investing in the stocks is essential. Moreover, HDB Financial Services is planning a merger and IPO, which we will briefly discuss.
Also Read - HDFC Securities Ltd vs. HDB Financial Services Ltd: Which One Makes A Good Investment Option
What Does the Q3FY23 Financial Report Say for HDB Finance Service?
The loan and asset finance provider recorded growth on both a quarterly and yearly basis. If we compare the data from the last two quarters, it is clear to see that the total income of HDB finance services increased from Rs. 30,478 to Rs. 31,547 million. It is a significant increase from the last December quarter when the total income was only Rs. 28,045 million. The expanding company revenue directly reflects the increasing consumer base of HDB Finance Services. The sales kept increasing exponentially in June 2022 and September 2022 and continued in the same fashion in December 2022.
Quarterly | Nine Months | Annual | ||||
Particulars | Dec 31, 2022 | Sep 30, 2022 | Dec 31, 2021 | Dec 31, 2022 | Dec 31, 2021 | Mar 31, 2022 |
Interest income | 22,576 | 21,758 | 20,454 | 65,461 | 62,686 | 83,630 |
Sale of services | 6,706 | 6,676 | 5,829 | 20,103 | 17,142 | 23,634 |
Other financial charges | 2,000 | 1,828 | 1,700 | 5,688 | 3,884 | 5,690 |
Net gain on fair value changes | 260 | 214 | 76 | 575 | 230 | 165 |
Net gain (loss) on derecognised financial instruments | 5 | 2 | (14) | (43) | (56) | |
Total Revenue from operations | 31,547 | 30,478 | 28,045 | 91,827 | 83,899 | 1,13,063 |
Finance Costs | 9,212 | 8,466 | 8,229 | 25,542 | 25,505 | 33,255 |
Impairment on financial instruments | 3,132 | 3,509 | 5,404 | 10,624 | 20,439 | 24,657 |
Employee benefits expenses | 10,261 | 10,052 | 8,482 | 30,367 | 25,360 | 35,004 |
Depreciation, amortisation and impairment | 292 | 262 | 247 | 803 | 744 | 989 |
Others expenses | 1,940 | 1,871 | 1,644 | 5,549 | 4,128 | 5,682 |
Total expenses | 24,837 | 24,160 | 24,006 | 72,885 | 76,176 | 99,587 |
Profit before tax | 6,710 | 6,318 | 4,039 | 18,942 | 7,723 | 13,476 |
Current tax | 1,585 | 2,065 | 2,238 | 5,539 | 4,290 | 6,634 |
Deferred tax | 109 | (458) | (1,240) | (736) | (2.411) | (3,272) |
Total tax expense | 1,695 | 1,607 | 998 | 4,803 | 1,879 | 3,362 |
Net Profit for the period | 5,015 | 4,711 | 3,041 | 14,139 | 5,844 | 10,114 |
Other Comprehensive Income (not of tax) | (58) | 199 | 200 | 200 | 4 | 138 |
Total Comprehensive Income (after tax) | 4,957 | 4,910 | 3,241 | 14,339 | 5,848 | 10,252 |
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However, there has been no significant increase in the total expenses, which meant the increasing revenue directly led to increased profit.
Share Price Overview: Solid Growth
HDB Financial Services is a subsidiary of the parent company, HDFC Bank. HDFC Bank and HDB Financial Services have recorded substantial revenue and profit growth. Moreover, HDFC Bank shares have performed incredibly well in the share markets. The figure below depicts the share prices of HDFC Bank. The HDFC Bank share price climbed to Rs. 1695 on April 13, 2023.
HDFC Bank and HDB Financial Services have filed a request for the merger to SEBI, which was given the green light. Now the company is preparing for the coalition in the second or third quarter of the financial year 2023-24.
Moreover, HDB Financial Services shares have also performed well in the unlisted market. Below is the share overview from the HDB finance report for Q3FY2023.
Quarterly | Nine Months | Annual | ||||
Dec 31, 2022 | Sep 30, 2022 | Dec 31, 2021 | Dec 31, 2022 | Dec 31, 2021 | Mar 31, 2022 | |
a. Basic (in Rupees) | 6.34 | 5.96 | 3.85 | 17.88 | 7.40 | 12.81 |
b. Diluted (in Rupees) | 6.33 | 5.96 | 3.85 | 17.87 | 7.40 | 12.80 |
Face value per share (in Rupees) | 10 | 10 | 10 | 10 | 10 | 10 |
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Reasons To Invest In HDB Financial Services Stocks
The increasing demand for HDB Finance Service and HDFC Bank in the share markets makes them a fabulous investment choice for retail investors. The leading analysts predict that this trend of consistent price growth for HDB Finance Services and HDFC Bank in the share market will last long. The impending merger of the two entities has positive sides to it, and the company disclosed that it would start preparing for the IPO after the merger.
To make substantial profits in the long term, it is recommended to invest early! Stockify is a safe and easy-to-use platform for stock purchases in India. Therefore, contact the professionals at Stockify and avail of their guidance to enjoy a hassle-free experience.
