HDFC Bank Ltd. share price target

Credit as well as deposit growth improved: HDFCB reported improvement in credit growth to 15% YoY vs 14.4% YoY. Domestic Corporate book slow down to 6% (10% in Q1FY22) and retail book improves to 13% vs 9% YoY (Q1FY22). Deposits growth improved to 14% YoY (4% QOQ) vs 13% YoY in Q1FY22; CASA deposits grew by 28% resulted CASA ratio at 46.8% vs 45.5% YoY. Asset quality improved; restructuring at 152bps: Bank Asset quality improved with GNPA at 1.35% vs 1.47% YoY (1.32% QoQ); NNPA at 0.4% vs 0.48% YoY. Credit cost comes in at 1.3% vs 1.7% QoQ (1.8% YoY). Bank annualized slippages stood at 1.8% vs...

HDFCB reported an inline quarter with NII/PPoP growth of 12%/14% YoY and PAT growth of 18% YoY to INR88.3b (inline). Profitability came in strong despite creating an additional contingent provision of INR12b, thus taking the total buffer to ~INR78b (~0.65% of loans). The bank witnessed a healthy pickup in business momentum as deposits / loans were up 4.5% QoQ each. Retail segment grew ~13% YoY while Commercial and Rural Banking grew robustly at 27.6% YoY. CASA deposits grew 29% YoY and the ratio now stands at 46.8% (+130bp QoQ)....

We maintain a BUY on the stock with a target price of Rs 1770/share (SOTP basis core book at 3.6x FY23Eand Rs 48 Subsidiary Value).

As per media reports, the Reserve Bank of India (RBI) has partially lifted restrictions placed on HDFCB in Dec'20, and has allowed the bank to source new Credit Cards. However, the restrictions on new digital application launches will continue. The RBI's move addresses the key overhang as HDFCB is the largest Credit Card issuer in the country, and this segment is key to the bank's overall profitability. In recent quarters, the bank reported a moderation in fee income/NII, affected by...

HDFC Bank was incorporated in August 1994. It provides corporate banking and custodial services and is also involved in treasury and capital markets. In addition, it offers project advisory services and capital market products,...

HDFCB's earnings profile of Rs77.3bn was lower than estimates (PLe: Rs79.8bn) led by a much weaker than expected NII growth of 9% YoY despite a loan growth of 14% YoY. NII profile has remained weaker than loan growth for some time now but unfavorable mix on high liquidity & non-retail focus is reflecting much higher. In our view, HDFCB will continue to face near term setbacks with difficult operating environment leading to weaker cross cycle NII of 12% YoY, higher slippages of 200bps and volatile earnings of 17-18%. Although, bank has a strong balance sheet with PCR of 67-70% and ability to...

Net interest margin for the bank came in at 4.1 per cent. This was only the third time since the beginning of FY17 that the bank's NIM came in this low. Total advances rose 14.4% y-o-y to Rs 11.5 lakh crore, of which retail loans were up 9.3% y-o-y to Rs 4.58 lakh crore. Similarly, commercial and rural banking loans were up 25% from a year ago to Rs 3.86 lakh crore. The bank also said wholesale loans were up 10% y-o-y to Rs 3.14 lakh crore. Total deposits of the bank grew 13.2% y-o-y to Rs 13.4 lakh crore. CASA deposits grew by 28.1% y-o-y with savings...

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We maintain BUY with a revised target price of Rs 1,720 derived using the SOTP method (core bank at 3.5xFY23 ABV + Subsidiaries value Rs 48/-).

HDFC Bank's asset quality deteriorated due to second Covid-19 wave as GNPA stood at 1.47% vs 1.36% YoY (1.32% QoQ) while NNPA at 0.5% vs 0.3% YoY (0.4% QoQ). Annualized slippage ratio increased to 2.54% vs 1.2% YoY (1.66% QoQ). Restructured assets stood at 80bps of advances as of Q1FY22; led by retail portfolio. However, 2/3rd of this constitutes unsecured assets. Collections were impacted in April and May however picked up in June. Advances growth remains stable at 14.4% YoY vs 14.0% YoY in Q4FY21 led by wholesale loans (10.2% growth) and retail loan growth of 9.3%. Deposits growth slowdown to 13% YoY (16% YoY in Q4FY21) while, CASA growth remain robust at 28%. NII grew slowly by 9%...