HDFC Bank Ltd. share price target

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,...

Fee income rose strongly by 14% q-o-q. Strategy to leverage technology and deeper penetration pulled down C/I ratio to 38.8% from 39.9% in Q2 FY19; apart from strong access to sticky...

HDFC Bank reported strong profitability numbers, better than market and our estimates. PAT grew by 26% YoY led by higher other income (up 39% YoY). NII grew modestly by 15% YoY against a loan growth of 20% YoY due to a decline in its margins. NIM declined by 10bps QoQ to 4.2% due to higher LCR on books to support strong growth going forward while fee income growth remained strong at 23% YoY. In expectation of seasonal headwinds settling down, we have largely retained our...

Advances growth came in healthy at 19.5% YoY to | 896983 crore. Traction in retail book stayed slower at 14.7% YoY, primarily led by subdued growth in auto book. Unsecured book (personal, credit cards) continued to grow at ~25% YoY, contributing to growth in retail book. Corporate book grew at a faster rate at 24.9% YoY, offsetting a moderation in retail book. Deposits growth continue to remain healthy at 22.6% YoY to | 1021615 crore, led by strong growth of ~28% YoY in term deposit. CASA growth continues to moderate as CASA ratio declined 43 bps QoQ to 39.3%....

Another Stable Quarter Amidst a Sluggish Environment HDFC Bank reported a healthy set of numbers in 2QFY20 with NII and net profit growing by 15% and 27% YoY respectively. Gross NPAs was stable sequentially at 1.38%, with slippages contained at 1.8% (annualized) for the quarter. CASA grew by a healthy 15% YoY, with 13% YoY growth in SA deposits. High growth in employee expenses at 23% YoY was mainly owing to rise in emp base and higher gratuity related provisions. Fee-based income grew by a healthy 23% YoY, with 26% growth excluding MF distribution fee. Loan growth during the quarter was driven by home, agri and corporate loans. The lending subsidiary, HDB Financial Services, continued...

We believe that structural drivers are in place for HDFC Bank and see its market share gain trajectory to continue. HDFC Bank is well placed to benefit from the slew of stimulus measures announced by the government and the regulator of late. This will likely see better growth opportunities along with less pressure on pricing, with the possibility of improved spreads from Q1 levels. Positive business growth fundamentals would support strong earnings growth and help the company sustain its valuation premium as compared to...

Total deposits as of June 2019 amounted to Rs 954554 crore, up 18.5%. CASA deposits grew at 12.8% with savings account deposits at Rs 253,338 crore and current account deposits at Rs 125663 crore. Time deposits at Rs 575553 crore, grew 22.5%. CASA deposits comprised 39.7% of total deposits as on June2019. The bank's continued focus...

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,...

HDFC Bank's profitability numbers for Q1FY20 have come largely in line with our estimates with PAT growth of 21% and NII growth of 23% YoY. Loan growth remained a bit tepid during the quarter at 17%. NIM improved by 10bps YoY to 4.3% while fee income growth remained muted at 12%. In expectation of seasonal headwinds settling down, we have largely retained our estimates and maintain BUY with a TP of Rs2,870...

20 July 2019 HDFCB reported 1QFY20 PAT of INR55.7b (+21% YoY, in-line). The bank stepped up provisions on the unsecured book, created a contingent provision of INR1.6b and additional general provision of INR0.9b toward the NBFC/HFC sector. NII grew 23% YoY to INR132.9b (in-line), while margins contracted 10bp QoQ to 4.3%. Core fee income grew 12% YoY to INR35.5b; treasury gain of INR2.1b boosted other income growth to 30% YoY. Opex grew ~19% YoY (flat QoQ) despite higher PSLC cost, resulting in healthy PPoP growth of ~29% YoY (core PPoP up 22% YoY). C/I ratio declined ~70bp QoQ to 39% (70bp improvement in the cost/core income ratio). Loan growth moderated to 17% YoY (+1% QoQ) to INR8.3t due to slowdown in auto segment (8.