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HDFC Bank Q1 net may rise 31% at Rs 1862cr: Motilal Oswal

Motilal Oswal expects HDFC Bank to report a 1.5 percent degrowth quarter-on-quarter (growth of 31.3 percent year-on-year) in net profit at Rs 1861.6 crore.

July 17, 2013 / 01:26 PM IST
 
 
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Motilal Oswal has come out with its first quarter (April-June) earnings estimates for banking sector. The brokerage house expects HDFC Bank to report a 1.5 percent degrowth quarter-on-quarter (growth of 31.3 percent year-on-year) in net profit at Rs 1861.6 crore.


Net interest income is expected to increase by 2.4 percent Q-o-Q (up 26.3 percent Y-o-Y) to Rs 4399.4 crore, according to Motilal Oswal.


Motilal Oswal report on HDFC Bank


On the back of buoyant retail demand, HDFC Bank is expected to deliver above industry average loan growth of 23 percent Y-o-Y. Deposit growth is also expected to be strong at 24 percent Y-o-Y.


Margins are expected to moderate by 15bp+ Q-o-Q but will remain steady on a Y-o-Y basis. Resultantly, NII growth is expected to be 2 percent Q-o-Q and 26 percent Y-o-Y.


Non-interest income growth is expected to be at 10 percent Y-o-Y led by moderation in forex income. Ex-forex, fee income is expected to grow at 17 percent Y-o-Y. Contribution from profit on sale of investments to be higher.

Asset quality is expected to remain healthy. However, stress in few segments of retail loans has increased, which need to be watched. The stock trades at 3.7x FY14E and 3.1x FY15E BV, and 18x FY14E and 14.4x FY15E EPS.

first published: Jul 17, 2013 01:26 pm

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