HDFC Bank share price rose 5 percent in early trade on April 20 after the company posted better numbers for the quarter ended March 2020.
On April 18, the lender reported a 17.72 percent year-on-year growth in profit at Rs 6,927.69 crore for the quarter ended March 2020. However, it was lower than the average of estimates of analysts polled by CNBC-TV18 which was pegged at Rs 7,228.9 crore.
Net interest income, the difference between interest earned and interest expended, grew by 16.15 percent YoY to Rs 15,204.06 crore for the quarter driven by strong loan and deposits growth, against CNBC-TV18 poll estimates of Rs 14,972.7 crore. Net interest margin for the quarter stood at 4.3 percent.
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Asset quality improved with gross non-performing assets falling 16bp sequentially to 1.26 percent and net NPA declining 12bp to 0.36 percent by the end of March quarter 2020.
In the absolute terms, gross NPAs were lower by 5.8 percent at Rs 12,649.97 crore and net NPAs were down by 20.72 percent to Rs 3,542.36 crore compared to December quarter.
Credit Suisse | Rating: Outperform | Target: Rs 1,280 per share
The company reported healthy Q4 earnings with strong loan growth & stable margin. The company management expects no significant dent in its credit quality.
The NPL slippages moderated in QoQ on the back of lower agri & corporate slippages, while company says it should not see a major deterioration in asset quality.
Credit Suisse expect larger revenue compression in FY21 & cut FY21/22 EPS by 9%/3%.
Kotak Institutional Equities | Rating: Buy | Target: Rs 1,050 per share
The 18% YoY earnings growth led by 20% growth in operating profits. Its NPL ratios showed improvement led by lower slippages.
It has built in conservative estimates on near-term earnings.
The valuations are attractive at current levels, while cut the estimates by 4-6% for FY21-22.
The company has well positioned to navigate through this crisis.
Axis Capital | Rating: Buy | Target: Rs 1,250 per share
The bank is best placed to navigate COVID-19-led disruptions. It has tightened its credit filters resulting in higher rejections.
The investment in franchise & digital leading are going to strong build-up of liabilities.
There is a reduction in loan growth by 8% as retail will slow down sharply, while increase FY21 credit cost to 155 bps besides 40 bps of contingency provision.
It expect RoA & RoE of 1.5%/14% in FY21 and remains its top pick in the sector.
Morgan Stanley | Rating: Overweight | Target: Rs 1,285 per share
The near-term should be volatile, but expect quick recovery in FY22 and see strong medium-term earnings outlook on expansion into interior India.
The strong earnings helped by higher margin/ strong growth and lower slippages & improving capital efficiency boosted the earnings.
The coverage improved to 142% on higher contingency provisions.
At 09:20 hrs HDFC Bank was quoting at Rs 948.00, up Rs 37.60, or 4.13 percent on the BSE.
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