HDFC Securities is a 97% subsidiary of HDFC Bank.
It offers a gamut of products and services across various asset classes such as Equity, Mutual Funds, Insurance, Fixed Income, Loans, Retirement Planning, Tax Planning, Commodities, Currency, Gold, Real Estate and Investment Advisory.
Financial Performance Highlights:
It is a debt free company with a networth of Rs 1550 crores on a tiny equity capital of 15.8 crores.
Return On Equity over the past 3 years has been 28%, 31% and 48% respectively, which is quite impressive.
Q1FY2022 EBITDA Margin is greater than 80% and PAT Margin is greater than 55%.
The company has grown by over 80% in FY2021 and even if we consider a CAGR of 35% -40%, FY2022 PAT could work out to around Rs. 1,000 Crs. with an EPS of around Rs. 635
Future Plans of HDFC Securities:
The company has announced that it is all set to create its own discount broking arm to compete with new age broking companies. Read more about it here
HDFC group’s Mutual Fund distribution business is hived off to HDFC Securities which will strengthen the performance of the company.
The company is in the process of strengthening its Investment Banking and Institutional Equity Division which will also contribute significantly to its bottom line.
The corporate reach of HDFC group is very good and therefore it will benefit the company greatly.
The financial investment penetration in India is very dismal compared to other countries like China, Brazil, Indonesia and USA. Hence the prospects of the company are good because the financial awareness level in our country is also increasing.
The shares are unlisted at present.
However, it is possible that the company may come out with an IPO in a few years’ time.
It seems to be promising option in the unlisted space.
Contact us for investing.