Arihant Capital's research report on HDFC Bank
HDFC Bank during Q4FY22 has reported 23% YoY growth in profit at INR 10,055 cr was slightly higher than our estimate of INR 9,992 cr. NII growth for the quarter slowed down to 10% YoY/2% QoQ to INR 18,873 cr despite strong credit growth of 21% YoY. NIM of the bank declined by 10bps QoQ at 4.0%. Other income growth for the quarter was slower at 0.6% YoY/-6.7% QoQ at INR 7,637 cr. Due to low operating income growth and slightly higher other OPEX, operating profit growth came in lower at 5% YoY/-2.5% QoQ to INR 16,357 cr as compared to our estimate of INR 17,577 cr. Provision for the quarter declined by 29% YoY and increased by 11% QoQ at INR 3,312 cr. As a prudent strategy, Bank has created INR 1,000 cr contingent provision during the quarter and carries total cumulative (floating + contingent) provision of INR 11,136 cr (0.8% of loans). GNPA ratio improved by 9bps QoQ at 1.2%.
Outlook
We marginally increase our estimate by 2-3% for FY23-24E and maintain our Buy rating on the stock with a revised target price of INR 1,864 (earlier INR 1,910), based on 3.4x FY24E P/ABV. At CMP, stock is trading at 2.7x to its FY24E ABV.
More Info
At 17:30 HDFC Bank was quoting at Rs 1,395.35, down Rs 69.50, or 4.74 percent.
It has touched an intraday high of Rs 1,440.00 and an intraday low of Rs 1,390.10.
It was trading with volumes of 493,756 shares, compared to its thirty day average of 467,630 shares, an increase of 5.59 percent.
In the previous trading session, the share closed down 1.90 percent or Rs 28.40 at Rs 1,464.85.
The share touched its 52-week high Rs 1,724.30 and 52-week low Rs 1,292.00 on 18 October, 2021 and 08 March, 2022, respectively.
Currently, it is trading 19.08 percent below its 52-week high and 8 percent above its 52-week low.
Market capitalisation stands at Rs 773,797.06 crore.
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