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 April 23, 2013 research report.
 
"In Q4FY13, HDFC bank's deposits and advances have grown at an impressive pace of 20% and 23% respectively. Bulk of the growth came in from retail segment which grew by 27%, whereas corporate segment has seen a relatively slower growth of 17%. The management expects it to continue to outpace system growth by 3-6%.  In line with strong growth in advances and higher CD ratio of 80.9%, NII grew by 21% to Rs 4,295 crore on a YoY basis. Improvement in NIMs is a positive surprise on the back of rebound of 200 bps sequential in CASA to 47.4%. Further, the management has inched up its NIMs guidance range to 4.1-4.5%."
 
"HDFC's GNPA has risen by 3bps to 0.97% in contrast to the decline of 9bps reported during last quarter. Net NPA as well as provision coverage (NPL) remain flat on a QoQ basis at 0.2% and 79.9% respectively. It made a floating provision of Rs 50 crore during the quarter.  The capital adequacy of the bank stood at 16.8% and Tier-1 capital adequacy was 11.1% in Q4FY13.  The management foresees CV portfolio to remains under stress, but expects to see stabilization and a very miniscule improvement on a sequential basis. This will enable it to bounce back to where it used to be. Besides, the construction equipment component of the CTG portfolio still shows sign of stress and has, in fact, shown a more or less similar NPL level or delinquency level.  In Q4FY13, the Bank's distribution network holds 3,062 branches and 10,743 ATMs in 1,845 cities/towns. There has been an increase of 518 branches during the year includes 193 micro branches which are primarily two member branches to expand and deepen the penetration in rural markets including in unbanked areas."
 
"HDFC Bank, as expected, has reported another stellar performance marked by decent growth in advances, NIMs, network expansion and steady asset quality. The strong earnings growth momentum and advances growth is likely to be sustained over the next couple of years. We expect robust credit growth, healthy fees and strong asset quality are likely to drive growth further. NIMs and the RoA too continue to remain impressive. We maintain our positive outlook on the stock. At the CMP of 689, the stock is currently trading at 3.9x P/Adj BV and 3.2x P/Adj BV for FY14E and FY15E. We recommend a HOLD on the stock," says Ventura research report.

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