Hold HDFC Bank: Ventura

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26 Aug, 2025 12:21

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Ventura has recommended hold rating on HDFC Bank, in its January 21, 2013 research report.
 
“HDFC Bank, over its peers, HDFC Bank has been able to continually drive valuation premium on the account of robust loan growth across all segment ie retail and corporate, NIM at 4%+levels, stable asset quality including higher PCR (~80%) and adequate capital for growth with superior return ratios. The strong earnings growth momentum and advances growth is likely to be sustained over the next couple of years and we expect earnings to deliver a CAGR growth of 21.4% over the period FY12-14, driven by 23% CAGR growth in advances and resilient NIMs. Though valuations continue to remain rich its performance is a benchmark for the entire banking industry and we are of the opinion that the valuation premium will be sustained over the forecast period. At CMP of Rs 659, stock is quoting at 3.7x and 3.1x FY14E and FY15E earnings, we recommend a HOLD on the stock.”
 
“HDFC Bank’s Q3FY13 advances have grown by 24% yoy to Rs.2,41,493 crore and has been broad based. Retail loans grew 29.5% yoy while the corporate loan book grew at a moderate 18.7%. Within retail, all segments have reported healthy growth viz auto loans (+17% yoy), CVs (+30%), home loans (+21% yoy), business banking (+33%yoy) and personal loans (+28% yoy). IN line with the advances deposit growth has also been strong (+22%) to Rs 2,84,119 crore. CASA share fell by 50bps sequentially to 45.4%, although growth in saving deposits remains strong at 4%qoq and 16%yoy. In line with strong growth in advances and higher CD ratio of 85%, NII at Rs 3,799 crore has grown by 20% yoy.”
 
“NIMs at 4.1% was marginally down by 10 bps Other income for the quarter was up 27% yoy to Rs 1,799 crore with fees and commissions growing by 24% to Rs. 1,402 crore being offset by trading losses in debt MF investments. Operating expenses were up 19% yoy, driven by non operating expenses (up 22% yoy). Expenses ratio declined to 46%, Vs. 49% in Q2FY2. Net NPA ratio remained unchanged qoq at 0.20% though gross NPA ratio deteriorated to 1.0% from 0.9% in Q2FY13.Total restructured assets formed 0.3% of gross advance. Provision coverage ratio stood at 80%. Credit cost improved marginally to 51.9 bps vs. 52.7bps in Q2FY13,” says Ventura research report.

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