Shares of HDFC Bank were trading marginally weaker in morning trade even as investors cheered its March quarter earnings.
The stock opened at its intraday high of Rs 1,984, as against its previous close of Rs 1,960, before investors chose to book profits.
The bank reported a standalone net profit of Rs 4,799.3 crore for the quarter ended March, 20.3 percent higher than its profit in the same quarter last year.
Standalone total income for the quarter under review was Rs 25,549.7 crore, up from Rs 21,560.7 crore reported in the March quarter last year.
The private sector lender's board also approved raising up to Rs 50,000 crore through private placement of perpetual debt instruments in the next 12 months.
"After providing, Rs 2,495.3 crore for taxation, the bank earned a net profit of Rs 4,799.3 crore, an increase of 20.3 percent, over the quarter ended March 31, 2017," HDFC Bank said.
The bank's consolidated net profit for FY18 was Rs 18,510.0 crore, which was 21.4 percent higher than its FY17 figure.
Consolidated advances grew 19.6 percent year-on-year to just over Rs 7 lakh crore as on March 31 this year.
On the asset quality front, the lender said gross non-performing assets (bad loans) stood at 1.30 percent of gross advances as on March 31, as against 1.29 percent as on December 31, and 1.05 percent as on March 31, 2017.
Brokerage: CLSA | Rating: Maintain Buy | Target: Raised to Rs 2,470
The global research firm said that a key positive is the 25 percent growth in operating profit. Further, asset quality is stable, it said, adding that unsecured loans are rising fast. Going forward, it expects 21 percent CAGR in earnings over FY18-21.
Brokerage: MOSL | Rating: Maintain Buy | Target: Rs 2,400
The brokerage house said that Q4FY18 was steady, while fee growth surprised positively. Further, the retail loan growth was healthy. While the asset quality was stable, provisions coverage ratio improved to 70 percent. It also expects the market share to increase and RoEs to remain the best.
Brokerage: Axis Cap | Rating: Maintain Buy | Target: Rs 2,400
The brokerage observed that the bank had a steady quarter with net profit being in line and having a stable asset quality. It highlighted that the bank is a preferred pick among retail lenders. It remains constructive on the stock owing to its pristine asset quality and retail franchise.
Brokerage: Kotak Sec | Rating: Reduce | Target: Rs 1,900
Kotak Securities said that there was a steady performance in the March quarter, but key concerns still remain. Loan growth slowed to 19 percent year on year in Q3, it said, adding that valuations may be a primary reason not to have a positive view on the stock. Going forward, it does not see any improvement in margin or reduction in share of credit costs.
Brokerage: Equirus | Rating: Upgrade to Long from Add | Target: Rs 2,320
The brokerage house said that while equity infusion will provide support, but it believes retail advances will weigh on margin. It has built in over 10 bps margin compression FY19, at 4.3%. The broker also believes that the bank will be a key participant in lending to bidders in NCLT resolution cases. It also sees healthy asset quality trends for the bank going forward. Among risks, it sees QIP getting delayed along with weak deposit accretion as issues.
Brokerage: Credit Suisse | Rating: Maintain Outperform | Target: Rs 2,230
Credit Suisse said that the deposit growth outpaced loan growth EPS in the March quarter numbers. Further, share of retail loans has increased ot 57 percent against 53 percent year on year. The asset quality is also stable, with GNPAs at 1.3 percent.
Brokerage: Morgan Stanley | Rating: Overweight | Target: Rs 2,500
Morgan Stanley said that headline earnings in-line & core PPoP 3% higher than our estimate. It also expects continued strength in core PPoP as NII accelerates. It also observed that market share gains will continue, given the balance sheet strength. The asset quality was also strong, while coverage improved to 87 percent.
Brokerage: IDFC Sec | Rating: Outperform | Target: Rs 2,515
IDFC Securities said that the March quarter net profit growth of 20 percent year on year was in line with expectations. Further, the agri slippages were high on provisions of Rs 255 crore.
Brokerage: BOBCAPS | Rating: Buy | Target: Rs 2,250
BOBCAPS said that the bank reported consistently superior earnings as well as asset quality. It expects the bank to be best placed among peers with respect to management of capital adequacy challenges. It expects the bank’s valuation to sustain, supported by robust core earnings.