Prabhudas Lilladher's research report on HDFC Bank
HDFCB saw a good quarter with core earnings beating estimates led by better NII and other income (excl. treasury). NIM was higher by 5bps due to superior yields driven by strong retail credit growth of +5.0% QoQ. Retail wholesale mix improved QoQ from 43:57 to 45:55 which may continue to enhance. With increased focus on retail and the merger in progress, opex might remain elevated over the medium term. TD accretion during Q1FY23 was healthy at ~Rs620bn, suggesting that garnering TD in relation to merger may not be challenging. Asset quality saw a blip due to higher slippages of which 25% were attributable to OTR and agri, although recoveries were higher. OTR pool declined QoQ from 1.14% to 0.9%; contingent provisions were maintained at Rs96bn or 69bps.
Outlook
We remain positive on HDFC Bank even though near term focus would remain on the merger and subsequent conditions. We maintain multiple at 3.2x on Mar’24 ABV and TP at Rs1,740. Retain BUY.
More Info
At 16:01 hrs HDFC Bank was quoting at Rs 1,347.65, down Rs 16.20, or 1.19 percent.
It has touched an intraday high of Rs 1,365.80 and an intraday low of Rs 1,342.00.
It was trading with volumes of 1,083,946 shares, compared to its thirty day average of 262,048 shares, an increase of 313.64 percent.
In the previous trading session, the share closed up 0.93 percent or Rs 12.55 at Rs 1,363.85.
The share touched its 52-week high Rs 1,724.30 and 52-week low Rs 1,271.75 on 18 October, 2021 and 17 June, 2022, respectively.
Currently, it is trading 21.84 percent below its 52-week high and 5.97 percent above its 52-week low.
Market capitalisation stands at Rs 748,660.13 crore.
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