HDFC Bank Ltd. share price target

19 April 2020 HDFC Bank (HDFCB) reported healthy business growth in 4QFY20, led by continued strength in its corporate portfolio while retail growth was soft. Operating performance stood flat as margin expansion was offset by lower fee income due to the COVID-19 impact. Further, the bank has made contingent provisions of INR15.5b, which affected earnings. HDFCB reported a steady quarter with PAT growth of ~18% YoY (-7% QoQ), supported by NII growth of 16% YoY (7% QoQ) as margins increased 10bp QoQ to 4.3%. However, provisions spiked to INR37.8b (+24% QoQ) as the bank made contingent provision of INR15.5b toward COVID-19. NII/ PPoP/PAT grew 16%/23%/25% YoY to INR562b/INR487b/INR263b. Core fee income growth moderated to ~15% YoY to INR42b affected by the lockdown, which resulted in loss of fees/other income of INR4.5b. Opex grew ~16% YoY led by employee expenses (+20% YoY). C/I ratio increased to 39% (+110bp QoQ) while PPoP stood flat QoQ at INR129.

LUCRATIVE VALUATIONS ON THE BACK OF CORONAVIRUS CONCERNS

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HDFC Bank is one of India's leading private banks & offers a diverse range of financial products and banking services to customers through a growing branch and ATM network and digital channels such as Netbanking, Phonebanking and MobileBanking. HDFC Bank offers a wide gamut of commercial and transactional banking services to businesses and organizations of all sizes. Bank's services include working capital finance, trade services, transactional services and cash management. Under Treasury services, bank's focus is on three main product areas: foreign exchange and derivatives, local...

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 reported strong profitability numbers, better than market and our estimates. PAT grew by 33% YoY led by higher other income (up 36% YoY). NII grew modestly by 13% YoY against a loan growth of 20% YoY due to a decline in its margins. PPoP grew by 20% YoY as cost to income rate improved to 38%; fee income growth remained strong at 23% YoY. In expectation of seasonal headwinds settling down, we...

Advances growth came in healthy at 19.9% YoY to | 936030 crore. Traction in the retail book remained slower at 14% YoY, primarily led by subdued growth in the auto book while growth in unsecured book (personal and credit cards) was healthy at ~25% YoY. Corporate book grew at a faster rate at 27% YoY, offsetting a moderation in retail book. Deposit growth was healthy at 25% YoY to | 1067433 crore, led by strong growth of ~28% YoY in term deposit. CASA saw higher growth compared to the previous quarter leading to ~20 bps uptick in CASA ratio sequentially to 39.5%....

HDFC Bank has recorded accelerated 33% jump in net profit to Rs 7416.48 crore in the quarter ended December 2019 (Q3 FY2020), driven by strong growth in non-interest income and continuous decline in cost-to-income ratio. The lower effective tax rate also boosted the bottomline of the bank in Q3FY2020. The bank has accelerated business growth crossing the...

HDFC Bank's (HDFCB) Q3FY20 PAT at Rs 74bn (+33% YoY) was ahead of our estimates largely due to strong non-interest income.