KR Choksey's research report on HDFC Bank
Net Interest Income (NII) for Q4FY23 stood at INR 2,33,518 Mn, a growth of 23.7% YoY/ 1.6% QoQ. The core NIMs were stable at 4.1% in Q4FY23, an improvement of 10 bps YoY. For FY23, the NII stood at INR 8,68,422 Mn, an increase of 20.6% YoY. Pre-Provision Operating Profits (PPOP) grew 13.8% YoY to INR 1,86,209 Mn but fell by 2.1% QoQ. For FY23, the PPOP grew by 9.9% YoY to INR 7,04,050 Mn. Net profit for Q4FY23 stood at INR 1,20,475 Mn, an increase of 19.8% YoY but a fall of 1.8% QoQ. In FY23, the net profit grew by 19.3% YoY to INR 4,41,087 Mn. HDFCB reported its GNPAs at 1.12% as of March 31, 2023, compared with 1.17% as of March 31, 2022. The NNPAs for the year ended stood at 0.27% vs. 0.32% as of March 31, 2022, of the net advances. Advances as of March 31, 2023, were reported at INR 1,60,05,859 Mn, a growth of 16.9% YoY/ 6.2% QoQ. Deposits grew by 20.8% YoY/ 8.7% QoQ at INR 1,88,33,947 Mn with CASA ratio at 44.4% as against 48.2% as of March 31, 2023.
Outlook
We maintain our target price at INR 1,960 per share, implying a P/ABV multiple of 3.2x to the adjusted book value of INR 612 per share for FY25E, showing an upside of 17.7% over the CMP. Accordingly, we reiterate our BUY rating on the shares of HDFC Bank Ltd.
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