Arihant Capital's research report on HDFC Bank
HDFC Bank during Q1FY23 has reported 19% YoY growth and 8.5% sequential decline in net profit at INR 9,196 cr, was slightly lower than our estimate of INR 9,308 cr impacted due to MTM and trading loss of INR 1,312 cr. NII growth for the quarter was at 14.5% YoY/3% QoQ to INR 19,481 cr was lower than our estimate of INR 19,785 cr. NIM of the bank was stable at 4% QoQ. Other income growth was lower at 2% YoY/-16% QoQ to INR 6,388 cr, due to treasury loss. Core fee income of the bank increased by 38% YoY to INR 5,360 cr. Due to low operating income growth on account of lower other income, PPoP growth was impacted and it grew by 1.5% YoY/-6% QoQ to INR 15,368 cr. PPOP, excluding trading and Mark to Market losses, grew by 14.7% YoY. Due to MTM loss resulting into lower other income growth, cost to income ratio of the bank increased from 38.3% to 40.6% on a sequential basis. Provision for the quarter declined by 34% YoY/4% QoQ to INR 3,188 cr. Bank continue to carry total cumulative (floating + contingent) provision of INR 11,081 cr (0.8% of loans).
Outlook
We marginally reduce our FY23-24 estimate by 3-4% and maintain our Buy rating on the stock with a revised target price of INR 1,847 (earlier INR 1,864), based on 3.4x FY24E P/ABV.
More Info
At 14:41 hrs HDFC Bank was quoting at Rs 1,345.65, down Rs 18.20, or 1.33 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 1,031,956 shares, compared to its thirty day average of 262,048 shares, an increase of 293.80 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 21.96 percent below its 52-week high and 5.81 percent above its 52-week low.
Market capitalisation stands at Rs 747,549.07 crore.
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