July 22, 2016 / 16:57 IST
Arihant Capital's research report on HDFC Bank
HDFC Bank reported steady set of numbers in line with estimates. Interest income increased by 18% YoY to Rs. 16,516 cr, while on QoQ basis it increased by 3%. Interest expenses increased by 14% YoY, while on QoQ basis it increased by 2% to Rs. 8,735 cr. Net interest income increased by 22% on YoY basis and 4% on QoQ basis to Rs.7,781 cr. Reported net interest margin increased on YoY basis by 10 bps to 4.4%. Return on Assets stood at 0.5%.
HDFC bank continued to report steady performance. NIM for the year is expected to be in range of 4% - 4.3%. Capital Adequacy for the bank stood at 15.5% with Tier- 1 CAR at 13.3%. We have valued stock on P/ABV(x) of 3.5(x) to its FY18E adjusted book value of Rs 382 per share and arrived at a target price of Rs. 1,337. We have ‘HOLD’ rating on the stock.
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