Prabhudas Lilladher's research report on HDFC HDFC reported a modest quarter as PAT growth remained modest at 7% YoY (3% lower than PLe) led by fall in capital gains, other income and higher depreciation. NII grew by 8% YoY (slightly ahead of PLe) led by healthy control on interest expenses and healthy 4% QoQ growth in loan portfolio. Loan growth was led by 5% QoQ growth in individual loans share of which in overall loan book increased by 44bp to ~70%. HDFC's loan growth remains under pressure as HDFCB has been buying nearly ~70% of loans it is originating for HDFC and we expect the trend to continue. Spreads remained stable at 2.31% though reported margins dropped by 10bp QoQ. We introduce FY18E and revise our PT to Rs1,320 (from Rs1,360) based on 3.6x Sep‐17E ABV. Maintain ‘Accumulate’. Asset quality deteriorated slightly as GNPL/NNPL increased by 5%/6% QoQ while coverage ratio declined marginally. However HDFC carries excess provisions of Rs3.2 bn which provides comfort. We maintain ‘Accumulate’ with revised PT of Rs1,320 (from Rs1,360) which corresponds to 3.6x Sep‐2017E ABV. For all recommendations, click here Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
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