Motilal Oswal has come out with its first quarter (April-June) earnings estimates for the banking sector. The brokerage house expects HDFC Bank to report a 4.5 percent degrowth quarter-on-quarter (growth of 20.1 percent year-on-year) in net profit at Rs 2681.2 crore.
Net-interest income is expected to rise by 4.5 percent quarter-on-quarter (up 21.5 percent year-on-year) to Rs 6284.6 crore, according to Motilal Oswal.
Motilal Oswal's Report on HDFC Bank:
Loan growth is expected to be healthy (24 percent YoY), aided by improvement in growth for some retail products and continued momentum in corporate loans.
Fee income growth will continue to lag loan growth in the near term however, expected to remain healthy at 17 percent YoY led by continued traction in Retail fees.
Cal. NIM is expected to decline 10bp QoQ, led by cut in base rate during the quarter.
Strong operating performance (20 percent + PPP growth) and healthy asset quality (GNPA to remain stable QoQ at 0.9 percent) would lead to 20 percent YoY earnings growth in 1QFY16.
HDFCB trades at 3.2x FY17E BV and 18.1x FY17E EPS. Comfort on earnings (21 percent + CAGR over FY15-18E) remains high.
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