KR Choksey's research report on HDFC Bank
Net Interest Income (NII) for Q3FY23 stood at INR 2,29,878 Mn, a growth of 24.6% YoY/ 9.4% QoQ led by robust growth in advances and improvement in yields. The Core NIMs were stable at 4.1% in Q3FY23, an improvement of 10 bps YoY. Pre-Provision Operating Profits (PPOP) grew 13.4% YoY/ 9.4% QoQ at INR 1,90,241 Mn. Net Profit stood at INR 1,22,595 Mn, an increase of 18.5% YoY/ 15.6% QoQ led by healthy growth in operating profits and lower YoY/ QoQ provisions. The GNPA were 1.23% as of December 31, 2022, vs a comparable 1.26% as of December 31, 2021. NNPA for the quarter ended stood at 0.33% vs 0.37% as of December 31, 2021, of the net advances. Advances as of December 31, 2022, were reported at INR 1,50,68,093 Mn, a growth of 19.5% YoY/ 1.8% QoQ. The deposit grew by 19.9% YoY/ 3.6% QoQ at INR 1,73,32,040 Mn.
Outlook
We roll over our valuation to FY25E and revise our target price at INR 1,960 per share (earlier INR 1,836), implying a P/ABV multiple of 3.2x to the adjusted book value of INR 612 per share for FY25E, showing an upside of 23.6% over the CMP. Accordingly, we reiterate our BUY rating on the shares of HDFC Bank Ltd.
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