In an interview to CNBC-TV18 Vaibhav Agrawal, VP – Research, Banking, Angel Broking, Jignesh Shial, Research Analyst, IDBI Capital Markets and Hatim Broachwala, Research Analyst- Institutional Equities, Nirmal Bang shared their views on private sector lender HDFC Bank’s Q2FY15 earnings and outlook on the stock.
Below is the verbatim transcript of the interview. For the complete reactions watch the accompanying videos
Surabhi: HDFC Bank and the headline numbers that we have; Rs 2,380 crore, the bottom line number. How does it compare with your estimate?
Agrawal: These numbers are broadly in line with ours in market estimate. So on the bottom-line there is more or less in line set of numbers.
Ekta: What is your sense in terms of a couple of ratios which are flashing for you now? Gross Non Performing Asset (NPA) at 1.02 percent versus 1.07 percent as well as Net Interest Margin (NIM) which have come in at 4.5 percent which compares to 4.4 percent in the previous quarter?
Agrawal: Again these numbers are broadly in line, slightly better than last quarter. So the overall trend of reasonably good set of numbers for HDFC Bank continues. For them to an extent their auto and commercial vehicles (CV) loans were pulling them a little bit down in terms of their overall growth rate etc. One would wait for any signs of improvement on that if the management has already seen that and we have already seen it in the industry numbers. So, probably from here on HDFC can further improve on the already good set of number that they have been delivering.
Ekta: Your first thoughts on HDFC Bank on all the parameters that we have already covered. Rs 2,380 crore in terms of profits this time round and NIM at 4.5 percent?
Shial: They are a very decent set of numbers although it is in line with what we were assuming, a couple of parameters were even better than the estimates. But overall the sense is it remains one of our top picks and the numbers has been delivered accordingly. So we continue to like the bank.
Ekta: Have you managed to calculate the NII from the P&L because we are just awaiting that to come by as well?
Shial: No, actually I got the margin numbers also from your side.
Surabhi: Your quick sense on HDFC Bank first of all, absolutely in line, anything that really stands out for you that could have been kind of off your mark with respect to the internals?
Broachwala: HDFC NII is slightly more than our expectations which is like 3-4 percent above expectations. The NIMs have gone up 10 bps up sequentially. That is core reason. The profitability numbers seems to be in line with our expectations. So overall asset quality GNP and NPAs are flatish but overall numbers are pretty good.
Ekta: What is your sense in terms of the stock and your rating on the stock?
Broachwala: We have a buy rating on the stock and we like the numbers. We will like to have a chat with the management and then take a call.
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