HDFC Housing Finance Company House This Stock

Banking stocks have been witnessing selling and the punters on the street say that there is more downside to come on the banking counter.
HDFC’s NPLs aggregated to 1.01% of the loan portfolio in Q3FY09 as against 1.12% in Q3FY08. The balance in the provision for contingencies account stood at Rs. 497.51 crore which is 1.9 times the regulatory requirement as stipulated by the National Housing Bank, the lowest level of NPLs seen in Q3FY09 for any year in the last decade.
HDFC remains the largest private sector housing finance company. And given the slowdown in the realty sector, fall in demand, it came as no surprise to see this being reflected on the bottomlines of HDFC’s Q3FY09 performance. The company's total income rose 42.54% on a YoY at Rs 2,917.77 crore but net profit declined by 15.73% at Rs 546.83 crore. For the third quarter, loan approvals were down 7.55% at Rs.9,640 crore. Instead of lending the money, HDFC invested the money to the tune of Rs.10,525 crore but its gains on these investments were down 24% on a QoQ at Rs.9022 crore.
An interest war of sorts was unleashed by SBI when it cut the rates on home loans by a straight 8%. HDFC reacted to this by levying a prepayment charge of 3%, making it expensive for its existing borrowers to foreclose their loan account by raising a cheaper loan from another bank. But it need not have really bothered as the fine print of SBI home loan form says that the 8% interest rate is applicable only for the first year.
HDFC remains fundamentally a very sound stock and best to use every decline to shore up on the stock for long term. Thanks