Sharekhan's research report on HDFC
HDFC Ltd. (HDFC) posted healthy operating performance during Q2FY2018. Net interest income (NII) grew by 13.7% YoY, aided by 17.7% YoY growth in loan book. Net interest margin (NIM) was stable during the quarter at 3.9% YoY. However, on a sequential basis, it showed a decline of 10BPS. Non-interest income during the quarter increased by 11.4% YoY to Rs.773.8 crore. Provisions during the quarter stood at Rs.95 crore (flat on a YoY basis), while net profit increased by 15.0% YoY to Rs. 2,101.1 crore.
Outlook
The premium valuation of HDFC is justified not only because of its conservative policies and market leadership but also due to high earnings visibility and best-in-class operating metrics. We have maintained our Buy rating on the stock with a revised price target (PT) of Rs. 1,900.
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