ICICIDirect's research report on HDFC BankPAT grew 20.1% YoY to | 3357 crore (slightly higher than our estimate) led by healthy traction in NII at 24% YoY to | 7069 crore Credit grew 25.7% YoY to | 436364 crore, again higher than the estimated 23.9%, led by the domestic retail book, which saw an increase of 30% YoY to | 214872 crore. However, this traction was largely from unsecured loans including 41% YoY in personal loans and 28% YoY growth in credit cards Margins improved to 4.3% from 4.2% QoQ, owing to strong traction in retail loans & CASA deposits There was no major impact of RBI’s asset quality review except for increase in provisions on some accounts. GNPA saw a 6 bps QoQ increase to 0.97%. Absolute GNPA rose 11% QoQ to | 4255 crore. Such QoQ increase in absolute GNPA was the highest in the last several quarters. Restructured assets were maintained at 0.1% of advances. There was no sale to ARCs We have tweaked but largely maintained our estimates. Considering the superior quality of balance sheet & stable management, we factor in 19.5% CAGR in NII, 21.6% in PAT in FY15-17E to | 15098 crore. RoA at ~1.9% is one of the best in class. The bank remains a portfolio stock & premium valuation may continue due to consistency in performance. We maintain BUY & revise TP to | 1170 (from | 1220 earlier) valuing at 3.5x FY17E ABV. For all recommendations, click here Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
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