HDFC Bank up 2% post Q3 show; brokerages remain upbeat

Net interest income during the quarter increased 24.1 percent to Rs 10,314.3 crore compared to Rs 8,309.09 crore in corresponding period, with strong loan growth of 27.5 percent.

"Net interest income was driven by average asset growth of 16.6 percent and a core net interest margin for the quarter of 4.3 percent," the bank said in its filing.

Brokerage: CLSA | Rating: Buy | Target: Rs 2,340

The brokerage expects 20% CAGR in earnings over FY17-20. Q3 PAT was In-line; encouraged to see 32% yoy growth in operating profit. CASA growth slowed albeit on a high base. Further, a planned capital raise will aid scope for network expansion.

Brokerage: Macquarie | Rating: Outperform | Target: Raised to Rs 2,676

Macquarie said that the firm is a strong compounding story with no asset quality issues. It has raised earnings estimates by 2-4% for Fy18-20.

Brokerage: Nomura | Rating: Buy | Target: Unchanged at Rs 2,350

Nomura expects the firm to delivery best in class PPOP growth over FY17-20. Current valuations of 18x fy20 EPS are not demanding.

Brokerage: Morgan Stanley | Target: Overweight | Target: Rs 2,500

The firm believes that the bank’s results show strong revenue/PPoP growth. Meanwhile, asset quality trends were steady, while CASA deposits grew given higher base following spurt in deposits post demonetisation.

At 12:44 hrs HDFC Bank was quoting at Rs 1,975.35, up Rs 24.15, or 1.24 percent, on the BSE. It has touched a 52-week high of Rs 1,986.00.