POSITIONAL TRADING: HDFC SHARE

Today’s stock is HDFC Ltd.

Now, we’ll have a look at the business of HDFC Ltd.

BUSINESS ANALYSIS

Housing Development Finance Corporation Limited (HDFC) was incorporated on 17 October 1977 and it is the first specialized Mortgage Company in India.      

The business is conducted through its branches in India and its overseas offices in Condon, Singapore and Dubai.

HDFC is the holding company for investment in its associate and subsidiary companies.

HDFC’s product range includes loans for purchase and construction of a residential unit purchase of land, home improvement loans, home extension loan, non-residential premises loans for professional & loan against property while its flexible repayment options include Step up repayment facility (SURF) and Flexible loan installment plan (FLIP).

The company include subsidiaries like HDFC developers Ltd, HDFC investment Ltd , HDFC holdings Ltd, HDFC trustee company Ltd, HDFC realty Ltd, HDFC property ventures Ltd, HDFC sales Pvt Ltd, HDFC venture trustee company Ltd, HDFC venture capital Ltd, HDFC ergo general insurance Ltd, HDFC Asset management company Ltd and HDFC Bank Ltd.

HDFC Ltd introduced HDFC certificate of Deposit Scheme in the year 1979.       

In 1981, they introduced their first retail deposit product.

The corporation also introduced the line of credit product (LOC) for employee owned housing in 1982.   

HDFC Ltd introduced Telescopic loan plan and short term bridging loan products.

In the year 1989, the corporation introduced 2 new products namely Home Improvement loans and Home Extension loans.

And also introduced Home Equity Loans and Corporate Employees Group Finance Arrangement.

The Corporation made a joint venture with Mahindra and Mahindra group and promoted propertymartindia.com a website for providing a range of real estate services.

Now, coming to the financials of HDFC Ltd.

FINANCIAL ANALYSIS

The Market Capitalization of HDFC Ltd is Rs 4,80,691 Cr.     

HDFC Ltd has a price to earnings ratio of 23.8 which is slightly lesser than industry price to earnings ratio of 27.9.

The return on capital employed of HDFC Ltd is 9.23% which indicates that the company has a bright future and a potential of showing a great growth curve.

The return on equity of HDFC Ltd is 13.2% which is also decent, and investors get a certain amount of returns.

The debt to equity ratio is 2.86 but for a banking stock this is quite normal as it is the need of their business.

Company is also paying a healthy dividend of 20.46%.

From the last 4 quarters (Sep 2020, Dec 2020, Mar 2021 & Jun 2021) the financing profit of HDFC has increased from Rs 4346 Cr to Rs 4492 Cr.

From the last 4 quarters (Sep 2020, Dec 2020, Mar 2021, Jun 2021) the net profit has increased from Rs 4600 Cr to Rs 5041 Cr.

The earning per share of the company is 27.92.

The revenue of HDFC Ltd is 1,01,726 Cr in March 2020 and it increased to Rs 1,39,034 Cr in March 2021.

The share capital also increased from Rs 346 Cr to Rs 361 Cr from last March 2020 to March 2021.

In the year 2021, the reserves have increased to Rs 1,56,045 Cr from Rs 1,26,133 Cr in the year 2020 which shows the  massive interest of investors into HDFC share price.

The Flls have a 72.22% holding. This company is majorly held by Foreign investors/companies. This is a good sign as in the coming future the company would definitely have a massive growth.

The Dlls have a 16.47% holding while only 11.18% is with the public. 

The government has a 0.14% holding.

The company is in safe hands and their growth is very prominent.

This is a brief overview of the financials of HDFC Ltd which shows the dominance in their respective market.

Now, let’s deep dive into the technicalities of HDFCshare.

CHART PATTERN ANALYSIS   

If we take a closer look at the chart in a daily time frame, there is a formation of a rounding bottom pattern.

HDFCshare has given a breakout from a resistance level from which the share price was falling for the past 5 months.
Now, HDFCshare has sustained above this resistance level and will make it as a support in the upcoming days.

For HDFCshare there is one target as stated in the above image.

The HDFC share price on 06^th August 2021 is Rs 2,628 which would definitely change in the upcoming future. 

MOVING AVERAGE 

For HDFCshare analysis, we are taking 9 days and 21 days moving average. 

When the 9 days moving average had crossed the 21 days moving average, the share showed an upward rally. 

The red line shows the 9 days moving average while blue indicates the 21 days moving average.

SUPER TREND

Super trend has changed its signal from selling to buying in the 1 day timeframe.

This is the right time to enter HDFCshare to attain maximum profits.

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